- Olam International to Acquire Dangote Flour Mills for 130bn
Aliko Dangote, Africa’s richest man, is in the process of selling Dangote Flour Mills to a Singapore based company, Olam International.
Olam International, founded in Nigeria as an exporter of cashew nuts more than 30 years ago, made a cash bid to buy Dangote Flour Mills Plc for 130 billion Naira ($362 million).
The deal was announced in a corporate disclosure released by the Nigerian Stock Exchange on Tuesday.
According to Thabo Mabe, the Director, Dangote Flour Mills, Olam International indicated interest in all the outstanding and issued shares of the company not presently owned by Olam through its subsidiary, Crown Flour Mills Limited. Olam, through its subsidiary, holds 5,113,229 shares of Dangote Flour Mills.
“The total consideration offered by Olam and being considered by the Board of Dangote Flour Mills for the entire 5 billion issued shares of the company is N130 billion.
“The consideration represents the enterprise value on a debt-free, cash-free basis, payable in cash at the closing of the proposed transaction. This consideration will be adjusted for net working capital and net debt as of 31 March 2019 or any other later date that may be agreed by Olam and the Board of Dangote Flour Mills to arrive at the final price payable to equity shareholders.”
As part of the deal, Dangote Industries Ltd., will invest 10 billion Naira in Dangote Flour Mills under the management of Olam.
The deal will enable Olam to tap into local demand for bakery, snacks, pasta products and return to the country it was founded about three decades ago.
“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,” K.C. Suresh, head of Olam’s grains and animal feed division, said in an emailed statement.
Olam International operates in 60 countries and has a market value of $4.5 billion.