Almarai (2280.SE) announced its interest in acquiring a majority stake in UAE-based food and dairy player, National Food Products Company (NPFC), after unofficial news on the matter broke in December 2015. NPFC has initiated a competitive sale process for a portion of its share capital and gave Almarai the nod to begin due diligence on the deal. NPFC is one of the UAE’s largest manufacturers and distributors  of food and dairy that sells brands such as Milco, Lacnor and Oasis bottled water in addition to having a joint venture with Danish dairy player Arla Foods. NFPC had expressed interest in a stake sale of up to 51%  back in October 2015. Media reports had previously cited a deal value of USD1.5 billion earlier in December. The news comes as somewhat of a surprise, in our view, as Almarai’s management had previously communicated that the company plans to focus on its existing categories and geographies (NFPC’s operations include water under Oasis, which is one of the largest players in the UAE) and turning around poultry, IDJ (Egypt and Jordan) and infant formula. (Company disclosure)   Almarai: SAR57.29 as of 14 April 2016, Rating: Neutral, FV: SAR48.75 per share, MCap: USD12,222 million, ALMARAI AB / 2280.SE