Flour Mills of Nigeria (FMN) and Honeywell Group Limited (HGL) have signed an agreement to which flour mills will acquire Honeywell Group’s portfolio company, Honeywell Flour Mills PLC (HFMP).
Gatekeepers News reports that the development was contained in a statement made available on Monday.
Honeywell Group Limited, according to the statement, agreed to sell a 71.69% stake in Honeywell Flour Mills to Flourmills of Nigeria.
It stated, “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 explained that the transaction will create a stronger company in the food industry.
“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 statement added that 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 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.”
Commenting 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.”
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.”
