Olam International made a binding offer to acquire all of Nigeria-based Dangote Flour Mills, or DFM, for 130 billion Nigerian naira, or around S$490.44 million, the agri-business said in an SGX filing Tuesday.
The final price will be adjusted downward to account for the 0.1 percent DFM stake Olam holds via its subsidiary, Crown Flour Mills, the filing said.
DFM, which is listed on Nigeria’s stock exchange, mainly is involved in wheat milling and making and distributing flour and pasta making, Olam said.
Olam added it also currently operates wheat milling and makes flour and pasta in Nigeria and Sub-Saharan Africa.
“The proposed transaction is intended to strengthen the company’s leading position in the large and growing flour and high value-added pasta markets in Nigeria and extract multiple synergies by combining the acquired assets with its existing local footprint,” Olam said.
The acquisition would be financed by internal cash resources and existing borrowings, the filing said.
The deal is subject to conditions, including the approval of DFM’s shareholders and regulatory approvals, Olam said.
Upon deal completion, DFM would be delisted from the Nigerian Stock Exchange, the filing said.