On Friday, Louis Dreyfus Company (LDC) announced the completion of the sale of a 45% indirect stake in ADQ, a holding company from Abu Dhabi. This event was historical as it introduced a shareholder not related to LDC's 170-year-old family business for the first time. The total value of the deal has not been disclosed, but part of the proceeds was used to fully repay LDC's $1.051 billion loan.
The process of selling ADQ shares was officially announced in November last year. This marked the end of a long search for an exceptional shareholder and the chairman of the board, Margarita Louis-Dreyfus. During a period of low profits, she accumulated debts by buying out shares from other family members.
LDC, known as Dreyfus, is one of the leading companies in agricultural trading, alongside Archer-Daniels-Midland Co (ADM.N), Bunge Ltd (BG.N), and Cargill Inc (CARG.UL).
CEO Michael Gelchie noted that the partnership with ADQ strengthens LDC's financial capabilities and accelerates strategic investments in new areas, such as plant-based proteins, as well as in the development of existing business lines.
In recent years, LDC has also faced financial challenges related to the Brazilian sugar firm Biosev, which was previously owned by LDC's parent company. A $1 billion loan provided by LDC's parent company was part of the financial assistance to Biosev.
The financial burden eased after the sale of Biosev to the Brazilian energy company Raizen (RAIZ4.SA) this year.
During the coronavirus pandemic, rising commodity prices and increased demand for grains from China contributed to LDC's profit recovery last year.
For the state-owned ADQ, investments in LDC expand access to food products that play a crucial role in the import-dependent Gulf region.
As part of the deal with LDC, ADQ signed a long-term agreement for the supply of agricultural products to the United Arab Emirates.