Saudi Arabia’s multinational dairy company Almarai, is buying Dubai-based total bakery solutions company Bakemart’s business in the UAE and Bahrain for $25.86 million in order to increase its product range across the country.
Almarai said that it had entered into a sale and purchase agreement with Bakemart UAE and Bahrain shareholders to acquire 100 percent of the company on March 15.
Almarai’s operating cash flow will completely cover this deal, and the financial effect of the purchase will be reflected in the company’s next quarterly performance. The transaction is still subject to regulatory approvals, including the General Authority for Competition in Saudi Arabia.
The dairy multinational pointed out that “this acquisition will further expand Almarai’s bakery product offering. It will also “enhance Almarai’s ability to increase its contribution to the kingdom’s food security, in alignment with the kingdom’s Vision 2030 program”.
Bakemart manufactures bakery products and frozen foods for the Middle East’s grocery and hospitality industries, as well as operates a range of its food retail and cake stores.
Food and beverage companies are constantly looking to expand their regional footprint and diversify their product offerings to better deal with pandemic-related challenges. Almarai had also raised its stake in Pure Breed Poultry in August 2019 and gained 100 percent ownership of processed meats company Premier Foods earlier that year.
The company announced a 7.7 percent rise in its 2020 fourth-quarter net income to $89.57 million in January. Revenue increased by 3.1 percent year on year to $1.01 billion during the reporting period.
However, due to pandemic-related market disruptions, it reduced investment activity last year. Almarai’s investment activity fell 73.2 percent to $209.9 million in 2020, accounting for just 5.1 percent of total revenue, compared to 20.5 percent in 2019.