Flour Mills of Nigeria on Monday announced the acquisition of Honeywell Flour Mills Plc (HFMP) at N80 billion in 71.69 per cent shares.
Flour Mills Plc, the biggest flour producer in Nigeria, in a statement on Monday indicated that the acquisition of Honeywell Flour Mills Plc was made in an agreement with the Honeywell Group to sell 71.69% shares in Honeywell Flour Mills to Flour Mills of Nigeria (FMN). The agreement was reached in the belief that it will strengthen food production in Nigeria.
According to the statement: “For the proposed combination of FMN through its affiliates and Honeywell Flour Mills Plc (“HFMP”), a portfolio company of HGL. At a total enterprise value of NGN80 billion, HGL will dispose of a 71.69% stake in HFMP to FMN.”
It was clarified that Enterprise Value includes the debt of Honeywell Flour which currently has a market value of N29 billion.
The statement further indicated: “The proposed transaction will combine two businesses with shared goals and create a more resilient national champion in the Nigerian foods industry, ensuring long-term job creation and preservation.
“The final equity price per share payable will be determined based on HFMP’s adjusted net debt and net working capital at the date of completion.
“The country and its food security agenda will benefit from both companies’ focus on developing Nigeria’s industrial capability, its agricultural value chain and specifically backward integration of the food industry.”
The Group Managing Director of Flour Mills of Nigeria, Omoboyede Olusanya, was cited to have stated: “The proposed transaction is aligned with our vision not only to be an industry leader but a national champion for Nigeria. We believe that this will create an opportunity to combine the unique talents of two robust businesses.
“As a result, we will have a better-rounded and more comprehensive skill set available to us as a combined diversified food business, thus, enabling us to better serve our consumers, customers and other stakeholders, whilst providing employees with access to broader opportunities.”
Also, the Managing Director of Honeywell Group Limited, Obafemi Otudeko, had highlighted: “Today’s announcement is in line with the evolution of Honeywell Group and our vision of creating value that transcends generations.
“For over two decades, we have supported Honeywell Flour Mills to build a strong business with a production capacity of 835,000 metric tonnes of food per annum.
“Following the transaction, Honeywell Group will be strongly positioned to consolidate and expand its investment activities, including as a partner of choice for investors in key growth sectors.”