Saudi PIF acquires half of Adeptio soon after Americana sale

Saudi Arabia’s sovereign wealth fund has made a rare foray into into the food industry after concluding a deal to buy half of Adeptio Holdings, which recently acquired a 67% stake in Kuwait Food Co., otherwise known as Americana.

Saudi Public Investment Fund (PIF) made the purchase, for an undisclosed amount, from Emirati tycoon Mohammed Alabbar, who will retain the remainder of shares in the investment firm.

An Adeptio subsidiary completed the acquisition in the Americana stake for US$2.35bn.

Following the acquisition of this stake in Americana, Adeptio will launch a mandatory tender offer for the remaining shares in Americana held by public shareholders,” the PIF said in a press release.

It said the transaction “forms part of the Public Investment Fund’s efforts to increase investment in non-oil sectors and build a portfolio that has greater geographical and asset class diversification, and which delivers attractive long-term financial returns for Saudi Arabia”.

Americana, which was established in Kuwait in 1964, employs some 60,000 staff in its branches in more than 13 countries. It holds franchise rights of restaurant chains in the Middle East including Pizza Hut and KFC.

PIF has a diverse portfolio that includes around 200 investments, 20 out of which are listed on the Saudi stock exchange.

Under economic reforms announced this year, the Saudi government aims eventually to expand the PIF, which was founded in 1971 to finance development projects in the country, from US$160bn to around US$2 and increase investments abroad.

The Adeptio transaction marks the PIF’s first big food sector deal this year. It has previously focused on the technology sector, in which it bought a US$3.5bn stake in the Silicon Valley car hire business Uber in June. Last month it suggested that it might invest up to US$45bn over five years in a technology investment fund that it would create with Japan's SoftBank.