Colombia’s greatest economic novel seems to be coming to an end. Grupo Nutresa, one of the largest processed food companies in the region, announced on Wednesday afternoon that it had signed a memorandum of understanding with the Emirati royal family’s International Holding Company (IHC), Afla Investment, also based in Abu Dhabi (United Arab Emirates Emirates), JDGB Holding of the Gilinski family, Grupo Argos and Grupo Sura. The agreement, which now has to be worked out, provides that the Gilinskis and their Arab partners will retain a large majority in Nutresa in exchange for divesting their significant stakes in the other companies of the so-called Grupo Empresarial Antioqueño, and for Nutresa to do so do leave it.
The pact is a step up in the offensive by Sheikh Tahnoon bin Zayed AlNahyan, an ally for several months with the Gilinski banking family, in its quest for control of Grupo Empresarial Antioqueño (GEA), which so far has owned Nutresa. The commitment must be fulfilled through the signing of definitive agreements, as set forth in a corporate circular, and through a number of processes to obtain applicable statutory, statutory and regulatory approvals.
The terms stipulate that companies JDGB and Nugil, both owned by magnate Jaime Gilinski, 66, will acquire a controlling interest of no less than 87% in Grupo Nutresa. And this in turn is no longer a shareholder of Grupo Inversiones Suramericana and Grupos Argos, the two other leading companies of GEA.
The end result is that once the measures are implemented, several of the most well-known brands in Colombian stores and supermarkets will come under the ownership of the Arab investors and the Gilinskis. Among them are the meat Zenú or Rica; Saltín, Ducales or Festival biscuits; Jet or Corona chocolates; types of coffee such as Sello Rojo or Matiz; Ice cream flavors like CremHelado and Doria or Monticello pasta. They are also owned by El Corral, Colombia’s largest hamburger chain.
The Gilinskis’ long-awaited control of Nutresa also means the big goal for the Emirates in a key part of this story given its good financial standing and is highly coveted in the Gulf region for the potential benefits it would bring to a country a desert card and with serious complications related to food security. In fact, the bloc formed by California’s millionaire family and Arab royalty already exists, with projects such as converting an old Panamanian air force base into an exclusive urban and commercial enclave.
Nutresa stressed that there will be no further investigation into the news beyond what has been said on the company’s website and the Financial Regulator. In any case, the horizon is beginning to clear in Colombia’s biggest corporate fight in recent years, in which the Gilinski family and their Arab allies have invested more than $2,500 million in a string of nine totally unusual hostile takeover bids for the calm waters of a market like the Colombian.
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The controversial International Holding Capital, a subsidiary of Abu Dhabi-based IHC Capital Holding LLC, was chosen by 53-year-old Prince bin Zayed as the conduit for a bid for Nutresa. So far, however, he’s had little luck and in the only public offering he launched in November last year, he managed to get a tiny 7.71% while bidding as high as 31%. It is a symbolic result for the representative of a confederation of emirates that store about 6% of the proven oil reserves underground.
According to Stanford University economist Javier Mejía Nutresa, Nutresa was considered the smallest of the three major GEA groups. However, its good earnings and stable cash flow make it a safe bet that any financial analyst would recommend. Its main owners so far are Grupo Argos with 10% and Grupo Sura with 35% under the classic cross-share system that has guaranteed GEA a kind of protective shield against hostile takeovers like the Who’s Lived last year since the late 1970s.
Pending the disclosure of more details on the agreement that led to the memorandum of understanding, the news also comes as a relief to observers who have been skeptical about extending a process that has stalled after hundreds of GEA shareholder families refused to consider more shares Selling the Gilinskis.
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