Sean Cronin 

LONDON: Abu Dhabi-based ADQ has agreed to acquire a major stake in Louis Dreyfus (LDC) as part of an $800 million investment in the commodity trader.

The deal comes as the coronavirus pandemic re-focuses attention on food security among Gulf states which rely heavily on imports.

It also opens up the 169-year-old family-owned group that is controlled by billionaire Margarita Louis-Dreyfus, to major outside investment for the first time.

As part of this transaction, Louis Dreyfus also signed a long-term supply deal with ADQ for the sale of agri-commodities to the UAE.

LDC is one of the big four global commodity trading houses, posting profits of $126 million in the first half of the year.

Upon completion of the transaction, a portion of its proceeds amounting to a minimum of $800 million will be invested into LDC, ADQ said in a statement on Wednesday.

The acquisition price was not disclosed.

“Food and agriculture is an attractive, core sector for ADQ to generate financial returns and strengthen the economic cluster locally,” said ADQ CEO Mohamed Hassan Alsuwaidi. “As one of the world’s leading agri-commodities and food companies, LDC represents a strategic investment opportunity for ADQ.”

This latest investment expands the Abu Dhabi investment group’s agricultural portfolio which includes the recently formed Silal that aims to boost local food production in the UAE and Agthia, one of the region’s biggest food and beverage producers.

Earlier this year, ADQ also agreed to acquire 50 percent of Al Dahra Holdings, a multinational agribusiness group specializing in animal feed and essential food commodities. 

“We are delighted to welcome ADQ to our shareholder group as long-term partners and investors, with a common vision for LDC’s future, and experience that will bring further value to the business and support the group’s ambition,” said company Margarita Louis-Dreyfus in a statement.