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 SIGN
AGREEMENT TO COMBINE FLOUR MILLS OF NIGERIA PLC AND
HONEYWELL FLOUR MILLS PLC
The transaction will create a strong National Champion for Nigeria to further enhance food security
Flour Mills of Nigeria Plc. (“FMN”) and Honeywell Group Limited (“HGL”) today announced that they have
signed an agreement for the proposed combination of FMN through its affiliates and Honeywell Flour Mills
Plc. (“HFMP”), a portfolio company of HGL. At a total enterprise value of NGN80 billion, HGL will dispose
of a 71.69% stake in HFMP to FMN. The proposed transaction 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”).
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 of
NGN80 billion. The final equity price per share payable will be determined based on HFMP’s adjusted
net 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-based
foods, sugar, starches, oils, spreads and breakfast cereals with HFMP’s market leading diverse and
differentiated range of carbohydrate products.
Stakeholders would benefit from the more than 85-year combined track record of FMN and HFMP
and 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 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 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.
• The combination will also serve as a catalyst for an even stronger stream of innovation that is focused
on local content offerings.
• The country and its food security agenda will benefit from both companies’ focus on developing
Nigeria’s industrial capability, its agricultural value chain and specifically backward integration of the
food industry.
• Nigeria presents vast opportunities, particularly in light of the country being the largest market on the
continent as well as a signatory of AfCFTA.
• HFMP’s listing will be retained for the foreseeable future. Minority shareholders of HFMP will be
treated fairly and in line with capital market regulation. Further information will be provided within the
required 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 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.”
The transaction is subject to regulatory approval.
