Colombian billionaire Jaime Gilinski, after successfully acquiring control of Grupo Nutresa, has teamed up with Abu Dhabi’s Sheikh Tahnoon bin Zayed al-Nahyan to propel the Latin American food company into the global market.
The partnership between Gilinski, his son Gabriel, and International Holding Company (IHC), an Abu Dhabi investment vehicle controlled by Sheikh Tahnoon, will result in their majority ownership of the Medellín-based group.
The stakebuilding campaign, which saw the new owners invest $2.7B in share tenders over 18 months, has attracted attention from potential corporate buyers considering the group’s breakup due to its increased valuation of approximately $6.4B on the Bogotá stock exchange.
“Every major food company and M&A banker has been calling wanting to buy Nutresa since the first deal was announced. But that is not the intention. For the moment, the intention is to keep it,” the person said.
Gilinski aims to leverage Sheikh Tahnoon’s network of companies to expand Grupo Nutresa into markets like India, Egypt, or Indonesia, directly competing with Nestlé and Mondelez in the low-to-middle income segments.
“Nutresa has the potential to grow from $4.5B of sales to $10B in two to three years via acquisitions and organic growth,” said the person, who declined to be identified because details of the partnership are confidential.
This strategic move aims to utilize Nutresa’s strengths in accessing raw materials, given Colombia’s prominence in coffee, cocoa, cattle, and meat exports. Additionally, Nutresa could benefit from Abu Dhabi’s sovereign fund ADQ’s 45% stake in agricultural trader Louis Dreyfus, enabling favorable commodity negotiations.
The partnership between Gilinski and Sheikh Tahnoon extends beyond Nutresa, as IHC had previously invested $200 million for a significant stake in Gilinski’s Colombian digital bank, Lulo.
Colombian Tycoon’s Stakebuilding Campaign in Grupo Nutresa Attracts Corporate Interest
Sheikh Tahnoon, who oversees extensive state investment holdings as the UAE’s national security adviser and chair of ADQ and First Abu Dhabi Bank, also assumed the role of chair at the Abu Dhabi Investment Authority, the emirate’s $850B sovereign wealth fund. This deal holds geopolitical implications for the Gulf, as noted by economist Javier Mejía from Stanford.
“Nutresa is great for IHC because it diversifies the Emiratis’ . . . sources of food, which is important in the event of a political dispute or climate shock. Most of their food processing portfolio is in MENA [the Middle East and north Africa] and South Asia. Nutresa works well as a means to geographically diversify that portfolio.”
During the extended financial struggle for control of Nutresa, the Gilinski family also pursued two other prominent Colombian companies, Grupo Sura and Grupo Argos, which were part of the powerful Grupo Empresarial Antioqueño (GEA)
The GEA, comprised of influential Medellín families, had established a complex network of cross-shareholdings to safeguard these companies against takeovers. The bidders, including the Gilinskis, conducted several tender offers and acquired substantial stakes in Nutresa and Sura but fell short of gaining controlling interests.
The battle between the parties escalated, leading to public accusations and numerous lawsuits. The Gilinskis alleged that the GEA managed the companies for the benefit of controlling families and management, disregarding the interests of minority shareholders. Meanwhile, the GEA sought to portray the bidders as corporate raiders with the intention of stripping the assets.
The parties ultimately reached a peace agreement through negotiations held in Abu Dhabi and via video conferences. They finalized the agreement, which involved a share swap, on June 16 in a Madrid hotel after initial discussions.
