Nigeria: Flour Mills Acquires Majority Stake in Honeywell Flour Mills For N80bn

Nigeria’s biggest flour maker, Flour Mills has announced an agreement to acquire Honeywell Group’s portfolio company, Honeywell Flour Mills PLC (HFMP), for 80 billion Naira.

The agreement which was disclosed in a press statement on Monday, revealed that Honeywell Group Limited has agreed to sell a 71.69 percent stake in Honeywell Flour Mills to Flour Mills of Nigeria (FMN).

The statement reads, “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.” Enterprise Value includes the debt of the company. Honeywell Flour Mills currently has a market value of N29 billion.

The press release also mentioned that the transaction will create a stronger company in the food industry. It stated, “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.”

“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”.

Adding that, “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.”

Speaking on the transaction, Honeywell Group Limited Managing Director, Obafemi Otudeko stated, “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.”

According to the Group Managing Director of Flour Mills of Nigeria, Omoboyede Olusanya, “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.”

Omotayo Araoye

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