Flour Mills of Nigeria Plc “FMN" has acquired 71.69% in Honeywell Flour Mills Plc “HFMP" for 80 billion Naira in a takeover merger. The announcement was made via an official memo from Honeywell Flour Mills Plc which reads: HONEYWELL GROUP LIMITED AND FLOUR MILLS OF NIGERIA PLC SIGNAGREEMENT TO COMBINE FLOUR MILLS OF NIGERIA PLC ANDHONEYWELL FLOUR MILLS PLCThe transaction will create a strong National Champion for Nigeria to further enhance food securityFlour Mills of Nigeria Plc. (“FMN") and Honeywell Group Limited (“HGL") today announced that they havesigned an agreement for the proposed combination of FMN through its affiliates and Honeywell Flour MillsPlc. ("HFMP"), a portfolio company of HGL. At a total enterprise value of NGN80 billion, HGL will disposeof a 71.69% stake in HFMP to FMN. The proposed transaction will combine two businesses with shared goalsand create a more resilient national champion in the Nigerian foods industry, ensuring long term job creationand 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 leverageopportunities stemming from the African Continental Free Trade Area ("AfCFTA").The key highlights of the proposed transaction are as follows:. HGL will dispose of a 71.69% stake in HFMP to FMN based on an enterprise value ofNGN80 billion. The final equity price per share payable will be determined based on HFMP's adjustednet debt and net working capital at the date of completion.The proposed combination is subject to approval from the appropriate regulators.. The complementary transaction combines FMN's market-leading offerings that include grain-basedfoods, sugar, starches, oils, spreads and breakfast cereals with HFMP's market leading diverse anddifferentiated range of carbohydrate products.Stakeholders would benefit from the more than 85-year combined track record of FMN and HFMPand their shared goal of making affordable and nutritious food available to Nigeria's population.. The scale of the transaction provides cmployees of the consolidated company with more careerdevelopment opportunities in a larger organisation, with the potential to create more jobs in theeconomy as it will have more brands and categories, and a larger and more geographically diverse footprint. • Customers across the nation will benefit from access to a wider product range and a robustpan-Nigerian distribution network, accessing greater number of points of sale supported by enhancedcustomer-focused sales teams and redistribution capabilities.• The combination will also serve as a catalyst for an even stronger stream of innovation that is focusedon local content offerings.• The country and its food security agenda will benefit from both companies' focus on developingNigeria's industrial capability, its agricultural value chain and specifically backward integration of thefood industry.• Nigeria presents vast opportunities, particularly in light of the country being the largest market on thecontinent as well as a signatory of AfCFTA.• HFMP's listing will be retained for the foreseeable future. Minority shareholders of HFMP will betreated fairly and in line with capital market regulation. Further information will be provided within therequired channels and timeframes.Commenting on the transaction, Honeywell Group Limited Managing Director, Obafemi Otudeko said:"Today's announcement is in line with the evolution of Honeywell Group and our vision of creating value thattranscends generations. For over two decades, we have supported Honeywell Flour Mills to build a strongbusiness 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 asa partner of choice for investors in key growth sectors."Omoboyede Olusanya, Group Managing Director of Flour Mills of Nigeria, said: "The proposed transactionis aligned with our vision not only to be an industry leader but a national champion for Nigeria. We believe thatthis will create an opportunity to combine the unique talents of two robust businesses. As a result, we will havea better-rounded and more comprehensive skill set available to us as a combined diversified food business, thusenabling us to better serve our consumers, customers and other stakeholders, whilst providing employees withaccess to broader opportunities."The transaction is subject to regulatory approval.