SAUDI ARABIA —The National Agricultural Development Company (NADEC) has signed a memorandum of understanding with Al Othman Agriculture Production and Processing Company (NADA) to pursue a proposed dairy livestock acquisition valued indicatively at SAR 370 million, excluding value-added tax. Signed on October 22, 2026, the framework also covers NADEC’s temporary use and operation of NADA’s dairy farm facilities after completion and a long-term arrangement under which NADEC would supply raw milk to NADA. The proposed transaction is located in Saudi Arabia, although the announcement does not specify the farm’s location.
The parties intend to negotiate three definitive agreements simultaneously: the livestock purchase, transitional occupation and operation of the related farm facilities, and the raw milk offtake arrangement. Completion remains conditional on satisfactory due diligence and the necessary regulatory, third-party and internal approvals. The memorandum is generally non-binding, apart from specified provisions, and does not guarantee that the transaction will proceed. It will terminate when definitive agreements are executed, 12 months after signing, or earlier if both parties agree in writing.
NADEC is required under the memorandum to pay NADA a refundable deposit of SAR 74 million, equivalent to 20% of the indicative purchase price. If the transaction completes, the deposit will be credited against the purchase price; if it does not complete, the deposit is repayable in full. Signing the memorandum does not otherwise create an immediate financial impact for NADEC. The final financial implications will be determined following execution of the definitive agreements.
The proposed arrangement combines an asset acquisition with transitional operating access and a continuing commercial supply relationship. Keeping the farm facilities available during the transition could help maintain livestock management and milk production while operational responsibilities shift. The planned raw milk supply agreement would also establish an ongoing commercial link between the two businesses after the livestock transaction, subject to the final terms agreed.
The development is relevant to Saudi Arabia’s dairy and food supply chain, particularly livestock production, farm operations and raw milk procurement. For NADEC, the proposed purchase could expand its dairy production assets, while the transitional facilities agreement may support continuity during integration. For NADA, the structure includes a potential livestock disposal alongside a long-term raw milk supply relationship. The announcement does not disclose livestock numbers, milk volumes, pricing terms or a completion date, limiting assessment of the transaction’s eventual production and earnings impact.
NADEC is a Saudi agricultural and food company with operations that include dairy production. NADA, Al Othman Agriculture Production and Processing Company, is the counterparty and owner of the livestock and related farm facilities covered by the proposed arrangement. Investors will be watching for the outcome of due diligence, execution of the three definitive agreements and confirmation of required approvals before assessing the transaction’s final value and strategic effect.
