In a strategic move aimed at strengthening its position in the services and hospitality sector in the Kingdom of Saudi Arabia, Caterion Catering Holding Company (formerly known as Saudi Airlines Catering) announced the signing of a binding sale and purchase agreement to acquire a 55% majority stake in Gulf Catering Company, for a total value of SAR 440.8 million.
Details of the financial structure of the deal
According to a statement published on the Saudi Stock Exchange (Tadawul) website, the total value of the transaction includes an initial cash payment of SAR 315.2 million upon completion, while the remaining SAR 125.6 million is contingent upon achieving specific financial and performance targets during the fiscal years 2025, 2026, and 2027. The agreement also includes a clause granting Caterion the option to acquire an additional 15% stake in Al-Khaleejia within three years of the completion of the current transaction.
Growth context and the hospitality sector in the Kingdom
This deal comes at a time when Saudi Arabia’s tourism and hospitality sector is experiencing unprecedented growth, driven by the Kingdom’s Vision 2030 goals of attracting 150 million visitors annually by 2030. Caterion, which recently rebranded to reflect its expansion beyond aircraft catering, is a key player in this transformation. This acquisition reflects a clear trend among major companies in the sector towards mergers and acquisitions to create powerful entities capable of meeting the increasing demand in mega transportation and entertainment projects.
Strategic integration and scale-up
Gulf Catering Company enjoys a strong position in providing hospitality and catering services within airport lounges and train stations across the Kingdom, in addition to specializing in bakeries and event catering services. Analysts believe this acquisition will create significant operational integration for Caterion, enabling it to expand its services to include the railway sector more broadly. This is a vital sector experiencing significant growth with new transportation projects in the Kingdom, thus reducing the company's overall reliance on the aviation sector and diversifying its revenue streams.
Financing and expected financial impact
Caterion clarified that the acquisition will be financed through a combination of its own resources and Sharia-compliant bank facilities. The financial results of Al Khaleejia are expected to be reflected in Caterion's consolidated financial statements immediately upon completion of the transaction and receipt of approval from the General Authority for Competition, with a tangible positive contribution anticipated by the second quarter of 2026. Al Ahli Capital has been appointed as financial advisor and Baker McKenzie as legal advisor for this transaction.
