Olam International set to acquire Dangote Flour Mills for N130bn
Leading food and agri-business Company in the world, Olam International is set to acquire 100 per cent equity ownership of Dangote Flour Mills Plc (DFM) for N130 billion on a debt free, cash free basis.
The proposed acquisition would include DFM’s five strategically located facilities engaged in flour and pasta manufacturing, as well as its logistics capabilities including access to the ports of Apapa and Calabar.
The Managing Director and CEO of Olam Grains and Animal Feed, K.C. Suresh, said that the acquisition is part of Olam’s strategies to strengthen its portfolio by investing in proven businesses where it has consistently performed and gained market-leading positions.
Suresh said: “The acquisition of DFM supports the strategy of the Grain and Animal Feed business, one of Olam’s prioritized platforms for growth, to expand our wheat milling capacity in high-growth markets, such as Nigeria”
“We are confident about the growth prospects in this country and this acquisition, doubling our installed capacity here, is evidence of our long-term commitment to the Nigerian economy.
“Since 2010, when we first acquired Crown Flour Mills in Nigeria, Olam has invested in and grown a world-class wheat milling franchise with a strong regional footprint across four countries in Sub-Saharan Africa. Bringing together Olam and DFM would provide enhanced manufacturing capacity and create synergies with our existing business to deliver improved products to meet customers’ needs in the market,” he added.
Olam’s and DFM’s complementary manufacturing footprint would allow a broader reach across the Nigerian population.
Olam will further leverage its strengths and scale in global sourcing, freight, risk management and operational excellence to deliver operational and cost efficiencies which in turn would deliver higher value to the Nigerian consumers by supplying them food staples manufactured in Nigeria, at a lower cost.
The proposed transaction would mean Olam acquiring all the outstanding and issued shares of DFM that it does not currently own through a Scheme of Arrangement. As per the offer terms, the final equity price per share payable to shareholders will be arrived at after adjusting for relevant net debt and net working capital of DFM.
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