Nigerian conglomerate UACN Plc has signed an agreement to acquire the minority shares of its unlisted subsidiary UAC Foods from South Africa’s Tiger Brands next month.
The purchase is expected to be completed in September, UAC of Nigeria said in a filing published on the website of the Nigerian Exchange Group. UAC of Nigeria currently owns 51 per cent of UAC Food’s shares.
Tiger Brands acquired a minority state in UAC Foods in 2011, following a joint venture agreement with the Nigerian firm to manufacture and distribute some sausage, ice cream and water brands.
This sale makes Tiger Brands the latest South African business to exit Nigeria, Africa’s most populous nation and largest economy, where economic weakness last year curbed consumer demand, input cost rises have cut into margins and currency volatility has further eroded profits.
It is exiting Nigeria about two months after another South African firm, Shoprite Holdings, sold its operations in the West African country to local investors.
Also, Tiger Brands in 2015 sold its shareholding in Dangote Flour to Nigerian parent Dangote Industries, three years after buying it.
UACN, with interests in real estate, paints and livestock feed, said it will operate Tiger Brands’ food company, after the acquisition closes in September.
Tiger bought 49 per cent of UAC’s food business in 2010, when Nigeria was touted as the next growth spot for retailers.
Recession in Nigeria in 2020 sapped demand, although the economy has recovered, growing 5.01 per cent in the second quarter of this year.