Flour Mills of Nigeria Plc is estimated to have an increased market share of 42 percent following the successful completions of its 71.69 percent stake acquisition in Honeywell Flour Mills Plc. (HFMP) and a 5.06 percent stake in HFMP held by First Bank of Nigeria Limited.
In a statement sent to the Nigerian bourse, the company revealed that the acquisition was approved by the Federal Competition and Consumer Protection Commission (FCCPC), Nigerian Exchange Limited (NGX) and the Securities and Exchange Commission of Nigeria (SEC).
According to analysts at FBN Quest, FMN will retain its position as the second-largest miller, however, with an increased capacity which will be 4.5 points behind Olam which has an industry market share of 44 percent.
FMN and Honeywell Group had on November 22, 2021, announced the proposed transaction which would bring together two businesses with shared goals in order to create a more resilient national champion in the Nigerian foods industry with Honeywell Group releasing a 71.69 percent stake to FMN at an equity price of N4.20 per share.
“This acquisition enables FMN to extend its reach across Nigeria, provide enhanced manufacturing capacity and create synergies to deliver improved products to consumers. At a total enterprise value
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Boye Olusanya, Group Managing Director, FMN said following the approvals, the company is set to begin execution of this landmark transaction that would positively impact Nigeria’s food security architecture and overall competitiveness.
“Our combined brands and businesses will mean an expansive scale of food production for both Nigeria and Africa. Together, Flour Mills of Nigeria and Honeywell Flour Mills will be able to achieve rapid growth while maintaining high-quality products serving the evolving needs of our consumers,” he said.
Olusanya added that the acquisition will further serve as a catalyst for an even stronger stream of innovation that is focused on local content offerings, enabling our customers across the nation to seamlessly benefit from improved access to a wider product range and a robust pan-Nigerian distribution network.
FMN currently operates 17 high-level food-processing facilities across 12 states in Nigeria. HFMP operates 3 facilities in Lagos and Ogun, with a supply chain stretching across the entire country.
A report by Agusto&Co, on Nigeria’s food industry states that Flour Mills is expected to maintain its market leadership by deepening volume growth across its product markets, while aggressively pushing its new value brands to garner market acceptance
“A wide product portfolio, diversified investments, and increasing financial flexibility, as well as access to the capital market, provides headroom for its growth in the near term,” it stated.
