Flour Mills announced that it has reached an agreement to buy 71.69% majority shareholding interest in Honeywell Flour Mills Plc (HFMP) based on an enterprise value of NGN80 billion. Flour Mills has also entered into an agreement with the FBN Holdings Group to acquire its 5.06% equity in Honeywell too. This brings Flour Mills’ total stake to 76.75%
According to Honeywell Group Limited Managing Director, Obafemi Otudeko, “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.”
Omoboyede Olusanya, Group Managing Director of Flour Mills of Nigeria, said: “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.”
On the acquisition of shares from FBN Holdings Group, Omoboyede Olusanya said: “The proposed transaction is part of our global growth strategy, which is aligned with our vision to not only be an industry leader, but also, a national champion for Nigeria in the Food and Agro-allied industries”.
Flour Mills of Nigeria is recognized as one of Nigeria’s leading Food and Agro-allied groups operating 17 modern and best in class manufacturing facilities across 12 states with production capabilities across grain milling, edible oil and sugar refining, agro inputs and animal nutrition and proteins.
According to Flour Mills and Honeywell Flour Mills, the scale of the transaction provides employees of the consolidated company with more career development opportunities in a larger organisation, with the potential to create more jobs in the economy as it will have more brands and categories, and a larger and more geographically diverse footprint. Customers across the nation will also benefit from access to a wider product range and a robust pan-Nigerian distribution network, accessing greater number of points of sale supported by enhanced customer-focused sales teams and redistribution capabilities.
Flour Mills’ revenue grew by 47% year on year to N523 billion in the first half of 2021. Performance was consistent across all key business segments in the Group with the food, agro-allied and support segments all growing by more than 35%.
The business transaction is subject to regulatory approval.
