The Honeywell Group Limited has reached an agreement on merging Honeywell Flour Mills (HFMP) and Flour Mills of Nigeria (FMN) for a total enterprise value of N80 billion. Information Guide Nigeria

THIS DAY reports that according to a statement, the Honeywell Group would sell its 71.69 per cent stake in HFMP to FMN, as it seeks to continue its journey of strategically refining and growing its investment portfolio while consolidating in sectors the company currently operates.

According to THIS DAY, Flour Mills has entered into an agreement with First Bank of Nigeria Limited to acquire the bank’s 5.06 per cent equity in HFMP.

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Honeywell Group and Flour Mills of Nigeria proposed a merger, though subject to regulatory approval, which would involve two businesses that have over the years established themselves as innovators and leaders in the food manufacturing industry.

THIS DAY reports that the proposed merger would create a platform for one combined entity to help in Nigeria’s push for food security and the goal of feeding a nation with a booming population of over 200 million.

According to the statement, the merger is coming at a time where when the opportunities stemming from the African Continental Free Trade Area (AfCFTA) are finally coming to the fore.

The Honeywell Group Limited Managing Director, Obafemi Otudeko who spoke on the deal between the two companies said: “This announcement is in line with the evolution of Honeywell Group and our vision of creating value that transcends generations. For over two decades, we have supported Honeywell Flour Mills to build a strong business with a production capacity of 835,000 metric tonnes of food per annum.

“Following the transaction, Honeywell Group will be strongly positioned to consolidate and expand its investment activities, including as a partner of choice for investors in key growth sectors.”

Also speaking, the Group Managing Director of Flour Mills of Nigeria, Omoboyede Olusanya, said: “The proposed transaction is aligned with our vision not only to be an industry leader but a national champion for Nigeria. We believe that this will create an opportunity to combine the unique talents of two robust businesses.

“As a result, we will have a better-rounded and more comprehensive skill set available to us as a combined diversified food business, thus enabling us to better serve our consumers, customers, and other stakeholders, whilst providing employees with access to broader opportunities.”

Together, both companies have a combined track record of more than 85 years and, once completed, this merger will see them bring together the resources and manpower that have led to a wide variety of market-leading products ranging from a combination of Flour Mills of Nigeria’s grain-based foods, sugar, starches, oils, spreads and breakfast cereals to HFMP’s diverse and differentiated range of carbohydrate products.

THIS DAY reports that although transactions like this raise questions on how many staff will be retained or how many will be let go? the merger is about creating a stronger combined business.

According to the statement, “It isn’t expected to impact the workforce or operations of either business heavily.

“In theory, this also means the new company will have even more fuel to inject more jobs into the economy. One of the overall impacts of this deal was the potential for innovation that it creates.

“Currently, food demands in Nigeria exceed supply. However, the creation of this new entity, first of all, better positions it to produce food at higher capacity and eventually develop a strategic network that encourages export across the world, particularly to Nigerians in the diaspora who remit billions of dollars back to the country every year. Jamb Result 

“As this deal closes, Honeywell Group intends to continue its journey of refining and growing its investment portfolio. This will see it consolidate in sectors where it currently operates, such as real estate, energy, financial services, infrastructure. It also intends to announce more strategic initiatives in the coming months”.

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