Indomie buys Dangote plants for N3.75b

De United said it has signed an agreement with Dangote Noodles to buy the plants

Dangote Noodles Limited, a unit of Nigerian company, Dangote Flour Mills, has sold two production lines in Ikorodu, Lagos State and Calabar, Cross River State to rival pasta maker, De United Foods Industries, maker of Indomie Noodles.
The transaction is valued at N3.75 billion ($12.26 million).
De United said it has signed an agreement with Dangote Noodles to buy the plants.
It would also buy stock worth N383.94 million.
The deal comes after Dangote sold a small stake in its cement business to foreign investors in a one-off stock market deal valued at N27 billion.
Dangote Flour Mills, majority owned by Africa’s richest man, Aliko Dangote, had said it wanted to quit the noodles business to focus on flour and pasta production, analysts say.
Nigeria’s noodle market is fiercely competitive and De United, with a market share of around 70 per cent, is seeking to consolidate the sector.
Privately-held Dangote Industries Limited, with interests in agriculture, real estate and truck assembly, bought back the flour unit it had sold to South Africa’s Tiger Brand for $1 in 2015 after it posted losses.
Shares in Dangote Flour Mills have more than doubled so far this year after rising 276 per cent last year.
The stock price was down 3.17 per cent on Tuesday at N9.20.
Dufil Prima Foods, the parent of De United Foods, is a privately held company set up over two decades ago, which has grown to become the largest pasta maker in West Africa.
De United said the transaction had been approved by both companies and the regulators.
A banking source close to the deal said De United would continue to produce noodles under the Dangote brand for two years after the acquisition.
In July, Dufil Prima Foods said it would raise N40 billion in the local debt market to broaden its funding base.