New acquisitions to emerge from Nigeria’s food, dairy businesses
With the Federal Government’s resolve to encourage firms to backwardly integrate their processes, as well as the prevailing economic situation in the country, there are indications that new mergers and acquisitions are expected in the food, beverages and dairy industry.
Indeed, the Central Bank of Nigeria (CBN) last month, restricted official access to forex for milk importation but exempted six companies from the restriction.
The CBN stated that it engaged the six dairy companies because they had keyed into its backward integration programme in order to enhance their capacity and improve local milk production.
In a circular issued on Tuesday, February 11, 2020, Dr. Ozoemena Nnaji, CBN’s Director, Trade and Exchange Department, listed the companies as FrieslandCampina WAMCO Nigeria; Chi Limited; TG Arla Dairy Products Limited; Promasidor Nigeria Limited; Nestle Nigeria PLC (MSK only), and Integrated Dairies Limited.
In terms of acquisitions, UK consumer goods giant PZ Cussons has announced the proposed sale of its Nigerian dairy business Nutricima to an affiliate of Dutch dairy firm FrieslandCampina.
PZ Cussons said in a statement to the London Stock Exchange, on which it is listed, that it has exchanged contracts for the sale of the assets associated with Nutricima’s business to FrieslandCampina WAMCO Nigeria.
Under Nigerian law, completion of the transaction is subject to merger clearance in the country.
Financial details relating to the transaction have not been disclosed.
PZ Cussons has also completed the sale of its Polish personal care brand, Luksja, to Athens-based personal care company, Sarantis Group.
Caroline Silver, executive chair of PZ Cussons, said: “The proposed sale of Nutricima and the sale of Luksja are further steps forward under our ‘focus, scale and accelerate’ strategy as we continue to streamline the group to focus investment on core personal care and beauty brands. This will enable us to deliver higher-margin earnings, in geographies which can scale, and support the return of the group to sustainable, profitable growth.”
In October, just-food reported that PZ Cussons was mulling options for a number of its dairy businesses including Nutricima.