In a notice sent to the Nigerian Stock Exchange (NSE) this week, Flour Mills Nigeria (FMN) announced the acquisition of an additional 5% stake in ROM Oil Mills. The company’s stake in the firm is now 95%, while the Shahimi family who were the founders hold 5%. Flour Mills had in 2013, acquired a majority stake in ROM Oil Mills.
The Shahimi Family are Lebanese families who immigrated into Nigeria in the 1900’s and own a vast business empire that includes dredging and oil services.
Possible reasons behind the increased stake
While Flour Mills in the statement said the acquisition was to increase its investment in the food and agro-allied sector, the company may have decided to purchase the stake once it came up for sale. This would prevent dilution of its ownership. The minority owners could decide to sell their remaining 5% stake sometime in the future. A total takeover would be more expensive with different minority shareholders. FMN has in recent years decided to focus on food and agro processing. The company sold its stake in Unicem, in 2014.
About ROM
ROM Oil Mills located in Ibadan, Oyo state is one of the biggest margarine and vegetable oil producers in the country. Flour Mills Nigeria (FMN) was incorporated on September 1 , 1960, as a private limited liability company with N1 million share capital and converted to a public limited liability company in November 1978. Flour Mills was founded by the Coumantaros family, who currently hold 56% of the company’s paid up share capital. The company’s operations span the food, agro –allied and logistics sectors. Flour Mill shares closed at N25.73 on the NSE, up 39% year to date.
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