Saudi-based dairy conglomerate Almarai has divested its 33% stake in United Farmers Holding Company (UFHC) to Saudi Agricultural and Livestock Investment Company (SALIC) for SAR105m ($28m).

The deal received all necessary regulatory and legal approvals.

Almarai intends to use proceeds from the deal to support business and its investments.

It further noted that the financial impact of this transaction will be beneficial to the results of the fourth quarter of 2018.

SALIC is one of the founding partners of UFHC.

Listed on the Tadawul stock exchange, Almarai specialises in food and beverage manufacturing and distribution.

Almarai struggled to maintain its profitability in the financial year 2018, with its third-quarter net profit level falling by 4.9% to SAR634.5m ($169m) from the same period of the financial year 2017.

Almarai’s revenue in the third quarter also remained largely flat at SAR3.37bn ($898m).

The dro in revenue has been partly attributed to higher cost and a general slowdown in the GGC consumer goods market.

In addition to dairy segment, Almarai is also involved in poultry, bakery, beverages and infant formula markets.

In 2007, the company entered into the bakery products market with the acquisition of Jeddah-based Western Bakeries. In 2009, it set up a joint venture with Chipita and Olayan Finance Company under the name of the Modern Company Industries and introduced 7DAYS brand.

The company became involved in the poultry segment in 2010 with the acquisition of Hail Agricultural Development Company (HADCO). It also launched a premium poultry brand called Alyoum. In the same year, it also entered into the infant nutrition market.