Flour Mills of Nigeria Plc and Honeywell Group Limited have announced the signing of an agreement for the proposed combination of FMN and Honeywell Flour Mills Plc.
The companies, in a joint statement on Monday, said Honeywell Group would dispose of a 71.69 per cent stake in its listed subsidiary to Flour Mills at a total enterprise value of N80bn.
Flour Mills announced in a separate statement that it had entered into an agreement with First Bank of Nigeria Limited to acquire the bank’s 5.06 per cent equity in Honeywell Flour Mills.
“Consequently, upon completion of the acquisition, and subject to obtaining all requisite regulatory approvals, FMN is set to hold a circa 76.75 per cent equity interest in Honeywell Flour Mills,” it said.
According to the joint statement, the proposed combination is subject to approval from the appropriate regulators.
“The complementary transaction combines FMN’s market-leading offerings that include grain-based foods, sugar, starches, oils, spreads and breakfast cereals with HFMP’s market leading diverse and differentiated range of carbohydrate products,” it said.
Commenting on the transaction, the Managing Director, Honeywell Group, Obafemi Otudeko, said, “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.”
The Group Managing Director of Flour Mills of Nigeria, Omoboyede Olusanya, 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.”