According to unconfirmed reports by Iranian state-owned Press TV, Savola’s Iranian edible oils operation may be sold following the diplomatic row between Saudi Arabia and Iran following the execution of a prominent Shi’ite cleric in the Kingdom. Even before the political tensions, there was growing scrutiny of Savola’s operation in Iranian press in 2015 labeling it as a Saudi company dominating the edible oils market. Savola owns an effective stake of 68.5% in Iran’s largest edible oils producer, which has a capacity of 735k tpa and a market share of 40-50%. It represented c11% of Savola’s 9M2015 revenue (c13% in 2014) and recurring earnings (c8% in 2015).    We do not value the Iranian operation separately, but as part of the edible oils business, which we value at SAR7.16 billion (USD1.9 billion). Assuming the operation represents c28% of the value of Savola’s edible oils business (which represents Iran’s contribution to Savola’s total proportionate edible oils capacity), its value is roughly SAR2.01 billion (USD535 million, c8% of market cap pre- the sell-off in the last two days). Savola lost nearly cUSD900 million in market value in the last two days (down 9% yesterday and 3% on Monday); hence, we think the sell-off is somewhat overdone. A senior executive at Savola was quoted as saying the company is committed to its Iranian operation despite the political tensions by Reuters. (Press TV, Reuters,  Hatem Alaa, Nada Amin)