Singapore’s agribusiness Olam sells California farmland to FPI for $110m
Singapore-based global agribusiness firm Olam International has sold 5,100 acres of California farmland to US-based real estate company Farmland Partners (FPI) for a cash consideration of $110m.
FPI will use the farmland to produce almonds, pistachios, and walnuts.
Both companies have also entered a revenue sharing model, under which Olam agreed to share annual revenue with FPI and operate orchards in California over a 25-year period.
Olam International Edible Nuts managing director and CEO Ashok Krishen said: “As part of our Edible Nuts strategy, we intend to further invest in growing almonds, pistachios and walnuts in California.
“We have built a sizable portfolio of prime orchards and have adopted sustainable and industry-leading agricultural practices in managing these orchards.
“We had been looking for the right partner who sees the long-term value of farming, while we are looking for an asset-light model to participate in the production economics of the tree crops.
“Farmland Partners, whose success is based on strong partnerships with farmers, is, therefore, a strategic fit for our business model.”
Completion of the deal is expected to take place upon the conclusion of FPI’s customary conditions.
The transaction is expected to close by November.
FPI owns more than 300 farms with an aggregate of 154,000 acres across seventeen states.
Upon completion of the deal, Olam will receive $110m from FPI, which will be used by the company reduce its invested capital and improve its return on invested capital.