Wilmar to Acquire Shares in Adani Wilmar Limited

Singapore-headquartered Wilmar International Limited, said that its wholly-owned subsidiary, Lence Pte. Ltd, has signed an agreement with Adani Commodities LLP (ACL) to acquire up to 31.06% of the existing paid-up equity share capital of Adani Wilmar Limited (AWL) held by ACL.

The option price per equity share will be mutually agreed upon by the parties, subject to a maximum price of $3.56 and the deal is said to value around $2 billion.

AWL, incorporated in India, is listed on BSE Limited and the National Stock Exchange of India Limited. ACL and Lence each currently own 571,019,435 equity shares of AWL (each representing 43.94% of the existing paid-up equity share capital), aggregating to 87.87% of the equity shares. The balance of 12.13% equity shares in AWL is held by public shareholders.

Under the relevant regulations issued by the Securities and Exchange Board of India, AWL is required to maintain a minimum public shareholding (MPS) of 25%. The agreement is subject to the completion of the sale of the necessary number of equity shares by ACL to comply with the MPS requirement.

AWL is India’s largest and leading edible oils and food FMCG company, with operations comprising 24 factories in 15 cities and a strong distribution network of more than 10,000 distributors and 0.72 million retail outlets across India.

With 100% urban coverage and a presence in over 30,600 rural towns, AWL exports to over 30 countries globally.

India, with a population of 1.42 billion and a median age of 28.4 years, enjoys strong economic growth of about 7% GDP. The Indian subcontinent, including Bangladesh, Sri Lanka, and Pakistan, offers tremendous growth potential for Wilmar’s agri-food businesses.

AWL Dominates FMCG Market

AWL currently holds a dominant position in the Indian FMCG market, offering a full range of oil, rice, flour, and other Indian food products. The rural market in India presents significant growth opportunities, and AWL is well positioned to capture a substantial market share, by leveraging Wilmar’s global operations and distribution network.

AWL’s leading brand, Fortune, is widely recognised by consumers in India. As India grows in wealth and sophistication, the demand for AWL’s branded staple consumer foods will increase in both quantity and quality.

AWL also exports products such as rice, castor oil and oleo chemicals to over 30 countries. These are important commodities in Wilmar’s global trades. A strong presence in India will allow Wilmar to source better and have better trade flows into Wilmar’s global network.

The acquisition of the Shares by Lence contemplated by the Agreement will result in AWL becoming a subsidiary of Wilmar and will be funded from internal sources as well as bank borrowings. Wilmar will explore opportunities to bring in strategic investors to participate in AWL’s growth story.

For illustrative purposes, assuming 403,739,517 shares (31.06% of AWL) are acquired at the maximum price of $3.56 per share, the Group will recognise a gain on deemed disposal of an associated company of approximately $1.48 billion and a Goodwill on Consolidation which results in a reduction in net tangible assets of approximately $1.12 billion (based on the unaudited financial statements of AWL as at 30 September 2024).