Olam International Ltd. has made a cash bid of N130 billion ($362 million) to buy Dangote Flour Mills Plc as the Singapore-based agriculture trader looks to expand in West Africa as part of a rejig of its portfolio.
Dangote Flour Mills is part of the business empire of Aliko Dangote, Africa’s richest man. The price was calculated on a debt-free basis, and will be adjusted to account for net borrowings, it said in a statement yesterday.
The move sees Olam going back to its roots. The company was founded in Nigeria as an exporter of cashew nuts 30 years ago, and has since grown into a global behemoth with operations in more than 60 countries and a market value of $4.5 billion. The deal will enable it to build on a country workforce of almost 3,000, while tapping local demand for bakery, snacks and pasta products.
“We are confident about the growth prospects in this country and this acquisition, doubling our installed capacity here, is evidence of our long-term commitment to the Nigerian economy,” K.C. Suresh, head of Olam’s grains and animal feed division, said in an emailed statement.
The acquisition is also part of a strategic shift toward areas that offer the most demand, including flour milling in West Africa. Nuts, cotton and tropical spice