Nigeria’s oil palm company, Presco Plc, is currently in talks to acquire a 100% equity stake in the Ghanaian Oil Palm Development Company (GOPDC).
The acquisition is projected to amount to $124.9 million, with Presco purchasing 70,580,000 ordinary shares of GOPDC at a price of $1.77 per share.
Presco, in a statement, said it will initially deposit $64.962 million, with the remaining balance to be settled in the future.
The statement added that Presco expects that the deal will aid in its currency diversification efforts, as GOPDC generates approximately 41% of its revenue from export sales.
GODPC is currently a subsidiary of Société d’Investissement pour l’Agriculture Tropicale (Siat) SA, one of the key shareholders in Presco,” the statement read.
“The company’s operations are similar to Presco’s, being into the cultivation of oil palm and extraction of crude palm oil and palm kernel oil, as well as the production of refined oil products.
“GOPDC presently operates from two oil palm estates in the Eastern Region of Ghana – the Kwae Estate and Okumaning Estate, with about 21,000 hectares of oil palm plantations, of which 13,000 hectares are developed.
“The company presently has processing facilities which consist of a 60 metric tonnes per hectare fresh fruit palm oil mill, 100 metric tonnes per day refinery, 60 metric tonnes per day palm kernel mill, a fractionation plant, and a palm kernel cake pellet plant.”
Presco added that the Ghanaian company has an annual production capacity of 35,000 tonnes of palm oil and palm kernel oil while it also has a storage capacity of 21,000 tonnes.
The Nigerian company also stated that GOPDC manufactures red palm oil and vegetable oil under the “King’s” brand.
According to the statement, the Ghanaian oil palm company also employs about 30,000 workers during its peak harvest season.
Presco disclosed its reasons for the 100% acquisition of GOPDC including increased market share and customer base.
The Nigerian oil palm company further said it expects that the transaction will help its plantation size to grow by 19%, from 43,457 hectares to 51,760 hectares.
Another reason for acquiring the Ghanaian company is economies of scale, as Presco expects the deal to help strengthen its competitive position, as well as optimising its resource utilisation.
