S/African Firm Buys 63% Of Dangote Flour For $188m

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Aliko Dangote yesterday sold 63 per cent of Dangote Flour to South African consumer goods firm, Tiger Brands in a deal worth $188 million, brokers said.
The sale of 3.1 billion shares on the Nigerian Stock Exchange(NSE) was done at N9.50 ($0.06) per share, after regulators’ approval last month.
The deal is Tiger Brands’ third and its biggest yet in Nigeria, which is seen as a growth area for consumer and food products.
The billionaire’s holding firm Dangote Industries Limited, will retain a 10 per cent stake in the flour mill after the shares of Dangote Flour were trading flat at N8.59 on the floor of the  Nigerian Stock Exchange(NSE), as brokers said the deal had already been priced in.
BusinessDay, South Africa, said Tiger Brands, which bought a controlling stake in the Nigerian pasta, noodle and flour manufacturer, Dangote Flour Mills (DFM), this week, has capacity for further acquisitions and was looking at more opportunities on the continent.
“Even after the Dangote transaction, Tiger has a strong balance sheet with capacity for further appropriate acquisitions,” said company secretary, Ian Isdale.
Tiger Brands, SA’s biggest food manufacturer, which owns All Gold, Tastic and Beacon, is focusing mainly on the African continent, but will look at meaningful opportunities in Latin America, where it already has business interests in Chile, Isdale said.
The deal with DFM, which forms part of the business empire of Africa’s richest man, Aliko Dangote, may bring more than just financial benefits to Tiger. A successful business relationship with Dangote, who runs sugar, flour, freight and cement businesses in a number of African countries, may provide Tiger with further business opportunities on the continent.
Dangote, whose net worth is estimated at $11.2 billion by Forbes will retain a 10 per cent stake in DFM and the right to appoint two directors.
The facilities at DFM, with a 30 per cent market share in flour and 40 per cent in pasta in Nigeria, is “world-class” and no significant investment will be required to improve operations, Isdale said.
“The key challenges in Africa are securing appropriate supply chains for both inbound and outbound logistics and ensuring that the products meet the appropriate consumer needs of both price and quality,” he said.
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