Olam to buy 75.2% of Spain's Macao Commodities Trading for US$20m

By ANGELA TAN

Olam International Limited said on Thursday that it plans to buy a 75.2 per cent interest in Macao Commodities Trading SL (MCT) for US$20 million.

'This transaction provides an accelerated entry into the Spanish and larger Iberian market for Olam,' the commodities group said, adding that the purchase also opens up new markets involving chocolate, bakery and beverage ingredients.

The purchase will include all land, buildings, inventories of MCT and its shareholding in Solimar Food Ingredients (SFI) - a joint venture established in 2005 as a 51:49 holding between MCT and Olam.

Established in 1994 in Valencia, Spain MCT is a leading supplier of cocoa powder, cocoa beans, desiccated coconut, dried fruits, vegetable fats and dairy products to the chocolate, beverage and biscuit Industries in the Iberian region.

Olam has the option to acquire the remaining 24.8 per cent interest in five years' time.

The acquisition would be funded through internal accruals. It will be both EBITDA and earnings accretive from the first full year after consolidation.