Tabuk Agricultural signs MoU to buy Al-Khalijia's food unit

Tabuk Agricultural Development Co. inked a memorandum of understanding (MoU) with Al-Khalijia Investment for Foods to acquire its food business and set up a new entity under the planned deal, the company said in a bourse statement on Sunday.

The preliminary agreement expires on March 31, 2018, unless terminated by either party or a final deal is concluded.

Under the MoU, Tabuk will own a 49 percent stake in the new firm for SAR 30 million. Tabuk is also entitled to cut this investment to maintain ownership, based on evaluation of the new entity.

The required due diligence process will be conducted by the Saudi-listed agricultural firm, the statement added.

Both parties will hire financial advisers for the planned acquisition.

Tabuk added that the company, its board of directors and major shareholders do not own any stake in Al-Khalijia.

The deal is subject to the approval of regulatory authorities and Tabuk's shareholders, the statement added.