Recently, Honeywell Group Limited (HGL) announced the proposed combination of both Flour Mills of Nigeria and Honeywell Flour Mills Plc (HFMP), a portfolio company of Honeywell Group Limited, to create a more resilient national champion in the Nigerian foods industry and further enhance food security in the country.
As part of the agreement, Honeywell Group Limited will
dispose of a stake in Honeywell Flour Mills Plc to Flour Mills of Nigeria. The
proposed combination will bring together two trusted and entrenched brands,
creating a single entity that is better positioned to benefit the growing
Nigerian population and leverage opportunities stemming from the African
Continent Free Trade Area (AfCFTA).
In case you are wondering what this will mean in terms of
operations and other related activities, here is everything you need to know
about this combination.
1. A 71.69% Stake At ₦80 Billion: Honeywell Group Limited
will dispose of a 71.69% stake in Honeywell Flour Mills Plc (HFMP) to Flour
Mills of Nigeria (FMN). At a total enterprise value of ₦80 billion, HGL will
dispose of a 71.69% stake in HFMP to FMN.
2. The 85-Year Track Record: When the transaction is
finalised, stakeholders would benefit from the more than 85-year combined track
record of FMN and HFMP and their shared goal of making affordable food
available to Nigeria’s population.
3. Increased Career Opportunities: The scale of the
transaction will provide employees of the consolidated company with more career
development opportunities in a larger organisation, with the potential to create
more jobs in the economy.
4. Improved Customer Satisfaction: Customers will benefit
from access to a wider product range and an even stronger stream of innovation
that can only be delivered by a combined entity with stronger teams and
financial muscle.
5. HFMP’s Listing Retained: HFMP’s listing will be retained
for the foreseeable future. Minority shareholders of HFMP will be treated
fairly and in line with the listing regulations of the Nigerian Exchange
Limited (NGX).
6. Improved Food Security: The country and its food security
agenda will benefit from both companies’ focus on developing Nigeria’s
industrial capability, its agricultural value chain and specifically backward
integration of the food industry.
7. Opportunities With AfCFTA: Nigeria presents vast
opportunities particularly in light of the country being the largest market on
the continent as well as a signatory of AfCFTA - the African Continental Free Trade.
AfCFTA, a trade pact that connects all 54 African countries
with one goal, plans to simplify customs procedures, facilitate investments and
create a central market for African goods and services.
With AfCFTA, the World Bank estimates a potential income
gain of about $450 billion by 2035. Total exports are expected to increase by
almost 29% within the same period.
8. Subject To Regulatory Approvals: The transaction is still
subject to regulatory approvals. Given the industry and structure of the two
companies, various regulatory bodies
will be required require to be notified and also to give approval and their
ensuing approvals will be critical to the finalisation of the transaction. It
is expected to close in the coming months.
9. Honeywell Group’s expansion: By disposing of 71.69% of
its stake in HFMP, Honeywell Group Limited (HGL), the parent company of
Honeywell Flour Mills can now be properly positioned to consolidate and expand
its investment activities and focus its efforts on key growth sectors. The
company’s Managing Director, Obafemi Otudeko, has said the transaction “is in
line with the evolution of Honeywell Group and its vision of creating value
that transcends generations.”
0 comments:
Post a Comment