Olam International, a food and agri-business company has offered to acquire full ownership of Dangote Flour Mill (DFM) for N130 billion. Dangote Flour Mill, in a disclosure on the Nigerian stock market, announced the bidding offer.
Olam International, through its subsidiary, Crown Flour Mills Limited, currently owns about 5.1 million shares in the issued share capital of DFM.
The notice which was signed by a director of the DFM, Thabo Mabe, said Olam’s bid is to acquire all the outstanding and issued shares of DFM that are not presently owned by Crown Flour Mills limited.
The transaction according to the notice would be on a debt-free basis, payable in cash at the closing of the proposed transaction which will be adjusted to account for net borrowing.
The transaction is intended to be executed through a scheme under section 539 of the Companies & Allied Matters Acts Chapter C20 Laws of the Federation of Nigeria 2004 and under applicable laws, rules and regulations.
The notice said, “If the conditions of the transactions are satisfied and sanctioned by the court, the company would be delisted from NSE.” DFM said the board would review the offer in the interest of the shareholders. “The board will keep both the capital markets and the public updated on tangible development in this regard, in line with the applicable regulatory requirements,” it added.
Olam, one of the world’s largest suppliers of cocoa beans and products, coffee, cotton, and rice, was founded in Nigeria as an exporter of cashew nuts about 30 years ago. It has grown over time, operating in more than 60 countries with a market value of $4.5 billion.
The deal will enable it to build on a country workforce of almost 3,000 while tapping local demand for bakery, snacks and pasta products.
Bloomberg also quoted the head of Olam’s grains and animal feed division, K.C. Suresh, as saying “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”, in an emailed statement.
The acquisition is also part of a strategic shift toward areas that offer the most demand, including flour milling in West Africa. Nuts, cotton and tropical spices have also been earmarked for expansion, Olam said in January, while the company will exit commodities such as sugar and rubber.
