Saudi wealth fund PIF eyes investment in date producer Bateel

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is in talks with the owners of gourmet date producer Bateel over a potential investment in the firm, sources told Reuters.

If a deal goes through, it could pave the way for Saudi Arabia, which is heavily reliant on oil exports, to expand overseas sales of the fruit. It is among the top three global producers of dates.

Bateel, whose Arabic name is derived from the young offshoot of a date palm, owns date groves in Al Ghat, about 250 km away from the capital Riyadh, and has a chain of cafes and bakeries for gourmet food and beverages.

The company is owned by Saudi businessman Ziad Al Sudairy and L Catterton Asia, an Asian private equity firm backed by France’s LVMH Moët Hennessy Louis Vuitton.

Bateel’s owners are in exclusive, bilateral discussions with the PIF, said five banking sources with knowledge of the deal, who declined to be named due to commercial sensitivities.

There is no process for the sale, and the size of the investment is yet to be determined based on a valuation of the company and any plans the PIF might have for it, the sources said.

Neither the PIF, which manages about $300bn in assets, nor Bateel responded to Reuters’ requests for comment. L Catterton Asia declined to comment.

The PIF has a strategy to help support Saudi companies become national and global champions in their sectors.

Its investments in the Saudi food and agriculture sector include dairy group Almarai, the Saudi Agriculture and Livestock Investment Company (SALIC), and the kingdom’s largest food products company Savola Group.

PIF also owns a stake in Kuwaiti food company Americana Group.

“This investment probably makes more sense from a cultural and economic point of view for the PIF than some of their other investments”, said a Saudi banker familiar with the matter, alluding to its experience investing in the food sector.

The owners are being advised by Goldman Sachs, the sources said.

Saudi Arabia is home to more than 28.5 million palm trees, according to the National Center for Palms and Dates.

The kingdom’s date exports reached 140,000 tonnes in 2017, worth SAR700m ($187m), according to the Saudi state news agency SPA. That accounted for around 2 per cent of the SAR4bn global market.

Palm trees are visible in the Saudi emblem and coat of arms, while its fruit is used by Muslims to break their fast during the holy month of Ramadan.