Olam International, a Singapore-based food ingredients supplier, has signed an agreement to divest up to 14.99% of its stake in New Zealand-based Open Country Dairy (OCD) to Talley’s Group for NZ$46.5m.
The company currently holds a 24.99% share in OCD, while Talley's owns 55.54% stake.
In accordance with the requirements of the New Zealand Takeovers Code, the sale process will be completed through a combination of direct sale of shares and acceptance of a partial takeover offer from Talley's.
It will provide cash for Olam, while maintaining product off-take arrangements with OCD, which plays a key role for Olam's dairy supply chain business.
Following the deal, Olam will continue to own a minimum 10% stake in OCD.
The company expects the deal to have no material financial impact on its earnings for the year ending 30 June 2014.
