Initiated in April, the takeover bid of the agro-industrial group Olam for Nigerian Dangote Flour Mills (DFM) was finally successfully concluded.
After the green light given by the regulatory authority and the Federal High Court of Nigeria, the shareholders of the flour and pasta producer overwhelmingly approved the terms proposed by Crown Flour Mills, the Singapore giant’s local subsidiary, which is seeking to strengthen its presence in Africa’s leading economic power and in fast-growing segments (milling). Quoted by local media, Anurag Shukia, CEO of Crown Flour, said his company « intends to maintain and develop Dangote’s activities, strengthen its production capacity and create synergies to provide improved products to its customers throughout the country ». On the industrial side, the takeover bid, approved on Monday 14 October, includes DFM’s five flour and pasta production units, as well as its logistics capacities, including access to the ports of Apapa and Calabar. As for the financial details, the transaction will involve the full repurchase of the 4.99 billion shares held by DFM securityholders – for an amount of $360 million – and will result in the company’s delisting from the Nigerian stock exchange. A happy outcome that should in particular make Aliko Dangote, founder of the eponymous business empire and first African fortune ($15.1 billion according to Bloomberg), happy. After launching Dangote Flour Mills in 1999, the Nigerian billionaire sold a majority of his shares to South African Tiger Brands in 2012 for about $100 million, before buying them back for… a symbolic dollar in 2015. Four years later, this (re-sold) stake is valued… at more than $200 million. A nice tumble. Dangote Flour Mills specializes in the production and marketing of wheat flour and wheat by-products. Sales ($311 million in 2018) by product family are split between flours (86%) and pasta (14%).