Tiger Brands grows Nigeria stake
25 September 2012
South African food company Tiger Brands has expanded its African stake by buying 63% of Dangote Flour Mills in Nigeria for approximately R1.5-billion, the company announced on Tuesday.
Tiger Brands is a fast-moving consumer goods company (FMCG) listed on the Johannesburg Stock Exchange.
It currently operates in Nigeria, Cameroon, Ethiopia, Kenya and Zimbabwe, and its acquisition of Dangote Flour Mills is its third - and largest - deal in Nigeria.
It follows the acquisition of biscuit manufacturer Deli Foods Nigeria Limited in April 2011 and UAC Food and Beverage Businesses in May 2011.
The purchase would add "significant scale to Tiger Brands' existing Nigerian businesses and represents a further important step in Tiger Brands' expansion strategy on the balance of the African continent," Tiger Brands said in a statement.
"Nigeria is a key strategic growth market in West Africa, the second-largest African economy and one of the fastest growing economies in sub-Saharan Africa."
Dangote Flour Mills is regarded as a leader in the flour and pasta market segment of Nigeria's consumer food sector, with a 30% market share in flour milling and 40% market share in pasta.
It is the second-largest flour milling company in Nigeria and is involved in flour milling and processing, as well as processing pasta and noodles.
"With an estimated population in excess of 160-million and projected average real GDP growth forecast over the next three years of approximately 7% per annum, Tiger Brands believes, particularly for consumer goods, that the potential of the Nigerian market is significant," Tiger Brands said.
"Tiger Brands views its strategic relationships with both the Dangote and UAC groups as crucial to its continuing success within the Nigerian FMCG sector.
"Over the medium term, operational synergies and efficiencies will be leveraged to ensure all parties benefit from these strategic alliances."