Flour Mills of Nigeria (FMN) has announced that it has obtained all the necessary regulatory approvals to acquire a 71.69per cent stake in Honeywell Flour Mills (HFMP) and another 5.06per cent stake in HFMP held by First Bank.
The firm stated that it can “confirm the transaction has now been consummated by the parties.”
This new information is contained in a notification dated Friday, signed by Joseph Umolu, Flour Mill’s Company Secretary/Director of Legal Services, and sent to the Nigeria Exchange Group.
The press release stated that the acquisition has been approved by all relevant regulators, namely the Federal Competition and Consumer Protection Commission (FCCPC), Nigerian Exchange Limited (NGX), and the Securities and Exchange Commission of Nigeria (SEC).
The acquisition of the majority stake by FMN was first announced last November, stating that 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 announcement stated that the acquisition will, “bring together two businesses with shared goals to create a more resilient national champion in the Nigerian foods industry.”
Importantly, the press release by FMN also noted that “Given FMN’s parallel negotiation for both stakes (in HFMP and First Bank), culminating in the agreements being executed, the transaction was concluded at N4.20 being the final equity price per share.”
The management team of FMN stated that the acquisition will be financed through cash and debt funding. It reads, “For FMN, management is working on a split of cash and debt funding, as it believes sole cash funding is not optimal.”
The management team explained that the transaction will be done with two Special Purpose Vehicles (SPVs). The first will be an FMN subsidiary which will hold 60per cent of the acquired stake, while the rest will be held by Excelsior Shipping, one of FMN’s major shareholders.
HMFP is expected to remain as its own entity for now, even after the acquisition is officially concluded. This deal is significant because the new singular entity will benefit from more than 85 years of combined history.
The Group Managing Director, FMN, Boye Olusanya said, “We are delighted that approvals have been received and we are all set to begin execution of this landmark transaction that would positively impact Nigeria’s food security architecture and overall competitiveness. We commend and thank all regulatory and approving bodies – FCCPC, SEC and NGX, for supporting this historic vision.” He further noted, “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. 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.”
