After five months of dotting the i’s and crossing the t’s, Flour Mills of Nigeria Plc a Nigerian agro-allied group led by Greek investor John Coumantaros, announced last week that it has acquired a 71.69-percent stake in Honeywell Flour Mills, as well as a 5.06-percent stake in the firm.
Following the completion of the transaction, Nigerian multimillionaire industrialist Obafoluke, who owns a majority stake in Honeywell Flour Mills, pocketed a total of N22.24 billion ($53.55 million) from his stake in the flour miller.
Otudeko owns 66.8 percent of Honeywell Flour Mills, a leading flour and pasta product manufacturer operating under the auspices of Honeywell Group, which has a diverse product portfolio including Honeywell Semolina, Honeywell Noodles and Honeywell Pasta.
After nearly five months of parallel negotiations, a majority stake in the miller was acquired by Flour Mills of Nigeria for N4.2 ($0.01011) per share. The agreement aligns with shared objectives of developing a more resilient national champion in Nigeria’s food and agro-allied industry.
Obafemi Otudeko, Honeywell group managing director, stated that the acquisition is consistent with the company’s desire to build a business that better serves Nigerian customers.
“As we entrust Flour Mills of Nigeria with building on Honeywell Flour Mills’ strong legacy, we will work closely with them to ensure seamless integration, laying the groundwork for the combined company’s success,” he said.
The acquisition of a majority stake in the Nigerian miller by Flour Mills of Nigeria represents Otudeko’s final attempt to unlock value from his stake, following a slew of dividend payments and remuneration from his business since its inception nearly four decades ago.
The Nigerian multimillionaire and his son Obafemi received $1.02 million (N414 million) in dividends from their Honeywell Flour Mills Plc shareholdings in 2021.
The recent acquisition will allow Flour Mills of Nigeria to increase manufacturing capacity and create synergies to provide better products to consumers as the combination of the two companies will result in a behemoth with assets worth N703 billion ($1.7 billion) and revenue worth N850 billion ($2.1 billion).
This will result in the formation of a strong national champion in Nigeria, combining Flour Mills’ market-leading offerings, such as grain-based foods, sugar, and breakfast cereals, with Honeywell’s diverse and differentiated range of carbohydrates products.
