Flour Mills of Nigeria Plc (FMN) and Honeywell Group Limited (HGL) would soon finalise their plan to merge, as they signed an agreement for the proposed combination of FMN through its affiliates.
The merger would see the establishment of Honeywell Flour Mills Plc (HFMP), a portfolio company of HGL, at a total enterprise value of NGN80 billion, in which HGL would dispose of a 71.69% stake to FMN.
Under the proposed transaction, which is subject to approval from the appropriate regulators, the final equity price per share payable would be determined based on HFMP’s adjusted net debt and net working capital at the date of completion.
The proposed transaction would, however, 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.
“Today’s announcement is in line with the evolution of Honeywell Group and our vision of creating value that transcends generations,” Honeywell Group Limited Managing Director, Obafemi Otudeko said.
“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.”
Omoboyede Olusanya, Group Managing Director of Flour Mills of Nigeria, 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.”