Flour Mills of Nigeria (FMN) Plc and Honeywell Group Limited have signed an agreement for the proposed combination of the two companies to create a strong company to further enhance food security in the country.
To this end, Flour Mills of Nigeria has acquired 71.69 per cent stake in Honeywell Group at a total enterprise value of N80 billion.
In addition, FMN also entered into an agreement with First Bank of Nigeria Limited to acquire the bank’s 5.06 per cent equity in Honeywell Flour, upon completion of the acquisition.
Subject to obtaining all requisite regulatory approvals, FMN is set to hold 76.75 equity interest in Honeywell Flour.
Group managing director of Flour Mills of Nigeria, Omoboyede Olusanya, said: “the proposed transaction aligned with our vision not only to be an industry leader but a national champion for Nigeria.”
A statement made available to LEADERSHIP said: “a combination of FMN and HFMP will bring together two trusted and iconic brands, creating a food business that is better positioned to benefit the growing Nigerian population and leverage opportunities stemming from the African Continental Free Trade Area (AfCFTA).”
According to the statement, the final equity price per share payable will be determined based on Honeywell Flour Mills’ adjusted net debt and net working capital at the date of completion.
“The complementary transaction combines FMN’s market-leading offerings that include grain-based foods, sugar, starches, oils, spreads and breakfast cereals with Honeywell’s market leading diverse and differentiated range of carbohydrate products.”
It added that “the combination will also serve as a catalyst for an even stronger stream of innovation that is focused on local content offerings.
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.
“Nigeria presents vast opportunities, particularly in light of the country being the largest market on the continent as well as a signatory of AfCFTA.”
Speaking on the transaction, the managing director, Honeywell Group Limited, Obafemi Otudeko said: “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.”