NADEC proposes a 370 million riyal purchase of NADA’s dairy herd
Saudi food company NADEC has signed a memorandum with NADA for a proposed dairy herd purchase valued at 370 million Saudi riyals before tax. The plan also covers temporary use of NADA’s farm and a long-term raw-milk supply agreement. Due diligence, approvals and final contracts remain outstanding, so the herd has not changed hands.
Economics & Markets··Morning
A proposed purchase with three linked agreements
Saudi food producer National Agricultural Development Company, known as NADEC, has signed a memorandum with NADA, a dairy and food company, covering a proposed purchase of NADA’s dairy herd. The indicative value is 370 million Saudi riyals before value-added tax. Both the detailed announcement and separate Saudi reporting describe a proposal, not a completed transfer of the animals.[1], [2]
NADEC identified three contracts that the companies intend to negotiate and sign together. One would transfer the herd to NADEC. Another would allow NADEC to occupy and use NADA’s dairy farm and related facilities for a transitional period while operating the animals. A third would create a long-term arrangement under which NADEC supplies raw milk back to NADA.[1]
A refundable deposit before a binding deal
The memorandum provides for a refundable deposit of 74 million riyals when it is signed, equal to one-fifth of the indicative herd price. If the transaction closes, the payment will be credited against the purchase price. If it does not proceed, the deposit is to be returned in full. The final price may also change through adjustments agreed in definitive contracts. The 370 million riyal figure thus remains an indicative price.[1]
Completion depends on satisfactory due diligence, final documents and the necessary regulatory, third-party and internal approvals. NADEC says the memorandum does not legally bind either company to finish the acquisition, although provisions on matters such as the deposit, exclusivity, confidentiality and the negotiation period are binding. The company expressly warns that the transaction may never be completed.[1]
Farm use and milk supply shape the plan
The memorandum ends when the definitive agreements are signed, twelve months pass or both sides agree in writing to terminate it earlier. NADEC has not given a date for completing the herd acquisition. The arrangement would leave NADA’s farm in use during the transition rather than require the herd to move immediately, but the operating terms still await the final contracts.[1]
NADEC says the memorandum has no present financial effect beyond the refundable deposit. It will assess the transaction’s financial effect when definitive agreements are signed and disclose material developments under capital-market rules. The proposed long-term milk supply to NADA matters because the plan covers the continued flow of raw milk as well as ownership of the animals.[1]
