Dipo Olowookere
By Dipo Olowookere
Flour Mills of Nigeria Plc has announced the acquisition of one of its competitors in the flour milling industry, Honeywell Flour Mills Plc.
A notice from the company on Monday disclosed that it would take control of the majority stake of Honeywell as well as the shareholding of FBN Holdings Plc in the firm.
Business Post reports that Honeywell Group Limited has a 71.69 per cent equity stake in Honeywell Flour, while FBN Holdings controls 5.06 per cent in the miller. With the transactions, Flour Mills will now take charge of about 76.75 per cent stake in its rival.
According to Flour Mills, the equity control of Honeywell Group would be purchased N80 billion, though the final equity price per share payable will be determined based on the firm’s adjusted net debt and net working capital at the date of completion.
Flour Mills explained that the acquisition 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.
“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),” it said.
It further disclosed that the deal will lead to the creation of more jobs in the economy and produce “more career development opportunities in a larger organisation.”
The firm also stated that customers across the nation will benefit from access to a wider product range and a robust pan-Nigerian distribution network, accessing a greater number of points of sale supported by enhanced customer-focused sales teams and redistribution capabilities.
It also stressed that Honeywell Flour will remain on the stock exchange “for the foreseeable future [and that] minority shareholders of HFMP will be treated fairly and in line with capital market regulation.”
“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,” the Group Managing Director of Flour Mills, Omoboyede Olusanya, stated.
On his part, the Managing Director of Honeywell Group Limited, Mr Obafemi Otudeko, stated that, “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.”
