IHC Capital Holding, a subsidiary of Abu Dhabi’s Sovereign Wealth Fund International Holding Company, and Grupo Gilinski, together with JGDB Holding and Nugil, has acquired a majority stake of 87% in Colombia’s Grupo Nutresa.
The transaction agreement was signed in June and is subject to corporate and regulatory approvals in different jurisdictions. Several legal firms have advised the stakeholders on signing and execution of the deal.
As a result of the agreement, Grupo Argos, and Grupo de Inversiones Suramericana (Sura) will cease to be shareholders of Nutresa and, the latter will cease to have stakes in Sura and Argos. The transaction involved the jurisdictions of Colombia, the US (New York), Panama and the UK.
Grupo Nutresa is the leading processed food company in Colombia with a 53.7% market share, and is one of the largest players in the food industry in Latin America with direct participation in 17 countries and has been recognised as the world’s most sustainable food company according to the DJSI 2021 Index.
According to The Latin American Lawyer, a bimonthly digital magazine, published by Iberian Legal Group, this transaction marks the closing of an exceptional series of takeover bids in Colombia launched by IHC and the Gilinski Group with the intention of acquiring stakes in what has traditionally been known as the “Grupo Empresarial Antioqueno” (GEA).
The Colombian parties, Grupo Sura, Grupo Argos, Grupo Nutresa and Grupo Gilinski are among the 10 largest conglomerates in Colombia, the first three are listed on the Colombian Stock Exchange and require innovative legal solutions subject to future approvals by the Colombian authorities. This transaction, once completed, will be the largest transaction in Colombian business history.
IHC is an Abu Dhabi-based holding company with a stock market valuation of over US$200 billion, total assets of over US$62 billion and revenues in 2022 of over US$13 billion, making it one of the most valuable holding companies in the Middle East.
Mendoza Abogados acted as counsel to IHC; Gómez-Pinzón, DLA Piper Martinez Beltran and Proskauer as counsel to JGDB/Nugil; Brigard Urrutia, Esguerra and Sullivan & Cromwell as counsel to Sura; Philippi Prietocarrizosa Ferrero Du & Uría (PPU), Londoño & Arango, and Skadden Arps Slate Meagher & Flom as advisors to Argos; and Posse Herrera Ruiz (PHR) and Simpson Thacher & Barlett as advisors to Nutresa.
Long Drawn Battle
The agreement was signed after a protracted battle to win control of Grupo Nutresa, Colombian billionaire Jaime Gilinski hopes that his deal partner, H H Sheikh Tahnoon bin Zayed al-Nahyan, IHC Chairman, will help turn the Latin American food company into a global player, the London-based Financial Times (FT) said.
The new owners spent a total of $2.7 billion in eight separate share tenders over 18 months to amass their stake and Nutresa, whose products span chocolate to cold meat cut, is now valued at about $6.4 billion on the Bogotá stock exchange, the FT report said.
Gilinski is planning to use H H Sheikh Tahnoon’s web of companies to take the food group into India, Egypt or Indonesia, challenging Nestle and Mondelez in low-to-middle income markets.
“Nutresa has the potential to grow from $4.5bn of sales to $10bn in two to three years via acquisitions and organic growth,” the FT report, citing a source, who declined to be identified because details of the partnership are confidential, said.
Colombia is one of the world’s top coffee and cocoa producers and a cattle and meat exporter. Nutresa could also use Abu Dhabi’s sovereign fund ADQ’s 45% stake in agricultural trader Louis Dreyfus to negotiate good terms on other commodities. ADQ is a state investment fund also chaired by H H Sheikh Tahnoon.
Nutresa is the latest addition to the banking-to-property empire built by Gilinski, whose wealth is estimated at $5.7 billion by Forbes magazine. His ties with the Abu Dhabi’s Royal family were visible when IHC, a fast-growing diversified group, invested $200mn for 49.9 per cent of Gilinski’s digital bank Lulo in Colombia in 2022.