SADAFCO signs non-binding agreement to buy stake in Poland’s Mlekoma

Saudia Dairy & Foodstuff Co. (SADAFCO) signed on Tuesday a non-binding agreement with Poland’s Mlekoma and its subsidiaries Foodexo and Mlekoma Dairy to continue the due diligence process of acquiring a controlling stake.

Upon completion of the process, SADAFCO will sign a binding offer with Mlekoma and conclude the legal and financial formalities of acquisition, the Saudi company said in a statement on Tadawul.

The estimated value of the deal is SAR 120 million and will be finalized upon completion of the due diligence process.

Mlekoma produces and sells milk products and semi-finished products, such as cheeses, butters, milk powders, and fluid milk and whey products.

SADAFCO said it considers the deal a strategic opportunity to invest in vertical (backward) integration, given that Mlekoma supplies one of its key raw materials, milk powder.