*FMN takes over FBN Holdings equity in Honeywell

*Honeywell shares up 9.735%, FMN unchanged

By Peter Egwuatu and Nkiruka Nnorom

Flour Mills of Nigeria (FMN) Plc has reached an agreement with Honeywell Group to acquire its 71.69 percent majority shareholding interest in Honeywell Flour Mills Plc. (HFMP) at N80 billion. In addition, FMN has also entered into an agreement with the FBN Holdings Group to acquire its 5.06 percent equity in HFMP.

The business combination, which is subject to regulatory approval, will see FMN hold 76.75 percent equity stake in HFMP upon completion of the acquisition.

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Following the announcement, the share price of Honeywell Flourmills rose sharply by 9.73 percent yesterday to close at N3.72 as shareholders who hoped to benefit from the transaction swarmed into the company, while shares of FMN remained unchanged though a total deal of 178 was recorded in the company.

Also, 4.04 million units were traded in Honeywell Flourmill in 60 deals.

The transaction, according to Flour Mills in a statement signed by Umolu Joseph, its Company Secretary and Director, Legal Services, is in line with FMN’s global growth strategy.

The company explained that the final equity price per share payable to the shareholders would be determined based on HFMP’s adjusted net debt and net working capital at the date of completion of the acquisition, while ‘Honeywell Flourmill listing would be retained for the foreseeable future.

The company also noted that the scale of the transaction would 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 as the combined business would have more brands and categories, and a larger and more geographically diverse footprint.

“The proposed transaction would 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.

“A combination of FMN and HFMP will bring together two trusted and iconic brands, creating a food business that is better positioned to benefit the growing Nigerian population and leverage opportunities stemming from the African Continental Free Trade Area (AfCFTA),” FMN said.

Commenting on the transaction, Omoboyede Olusanya, Group Managing Director, FMN, said: “The proposed transaction is part of our global growth strategy; which is aligned with our vision to not only be an industry leader but also, a national champion for Nigeria in the food and agro-allied industries”.

Also commenting, Obafemi Otudeko, Managing Director, Honeywell Group Limited, 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.

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