Saudi-based dairy conglomerate Almarai has signed a sales purchase agreement with Alamar Foods to acquire 100% of Premier Foods shares for SAR108m ($28.7m).

Premier Foods provides meat and poultry products to the food services industry in the Middle East.

With this acquisition, Almarai intends to further expand its footprint in the foodservice channel.

Almarai completely financed the deal through its operating cash flow, and the financial impact of this acquisition will be seen in next quarter’s results.

Listed on the Tadawul stock exchange, Almarai specialises in food and beverage manufacturing and distribution.

“Almarai completely financed the deal through its operating cash flow, and the financial impact of this acquisition will be seen in next quarter’s results.”

Although Almarai is one of the leading dairy producers in the Middle East, it also owns poultry brand Alyoum.

In 2009, Almarai entered the poultry sector with the acquisition of Hail Agricultural Development Company (HADCO).

Last month, Almarai divested its 33% stake in United Farmers Holding Company (UFHC) to Saudi Agricultural and Livestock Investment Company (SALIC) for SAR105m ($28m) after receiving necessary regulatory and legal approvals.

The company noted that it intended to use proceeds from the deal to support business and its investments.

In addition to the dairy segment, Almarai is also involved in poultry, bakery, beverages and infant formula markets.

In 2007, the company entered the bakery products market with the acquisition of Jeddah-based Western Bakeries. In 2009, it set up a joint venture with Chipita and Olayan Finance Company under the name Modern Company Industries and introduced 7DAYS brand.