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Business News

UPDATE: Dangote announces impending sale of Dangote Flour Mills Plc to Olam

The Board of Dangote Flour Mills Plc has notified the NSE and the investing public about the acquisition of its shares by Olam International Limited.

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Dangote Flour Mills Plc

The Board of Dangote Flour Mills Plc has notified the Nigerian Stock Exchange, its shareholders, and the investing public about the receipt of a binding offer from Olam International Limited to acquire all of Dangote Flour’s outstanding shares that are not currently held by Olam or its subsidiary.

According to the public disclosure which was obtained by Nairametrics, Olam International Limited offered a total of N130, 000,000,000.00 to buy out the entire issued shares of Dangote Flour Mills Plc. The offer is currently being considered by the flour manufacturer’s board of directors.

The statement gave further details about the deal, thus:

“The total consideration (the “Consideration”) offered by Olam and being considered by the Board of DFM for the entire 5,000,000,000 issued shares of the company is N130, 000,000,000.00 (One Hundred and Thirty Billion Naira Only). The Consideration represents the enterprise value on a debt-free, cash-free basis, payable in cash at the closing of the proposed Transaction. This Consideration will be adjusted for the net working capital and net debt as of 31 March 2019 or any other later date that may be agreed by Olam and the Board of DFM to arrive at the final price payable to equity shareholders. The final price to be paid to the shareholders of the Company would be adjusted downwards to exclude shares held by Olam through its subsidiary.”

Olam’s subsidiary already owns some shares in the company

Crown Flour Mills Limited, which is a subsidiary of Olam International Plc, currently holds a total of 5, 113, 229 units of shares in Dangote Flour Mills Plc.

More Details about the Deal…

How the transaction will be executed: The statement from Dangote Flour Mills Plc further disclosed that the “transaction will be executed through a Scheme of Arrangement, under Section 539 of the Companies & Allied Matters Act Chapter C20 Laws of the Federation of Nigeria 2004”. Other applicable laws, rules/regulations will also be considered.

The offer will also be subject to approvals

Before the deal eventually takes effect, it will also be subject to shareholders’ approval, regulatory approval, as well as a court sanction; specifically the Federal High Court.

Also note that after the conditions of the transaction are met and fully approved by all concerned stakeholders, Dangote Flour Mills Plc will delist from the Nigerian Stock Exchange.

In the meantime, the Board of Dangote Flour Mills Plc reiterated that it will duly review Olam‘s offer in the best interest of the shareholders. The NSE and the investing public will be updated with the latest details as they unfold.

Special Note

Current shareholders of Dangote Flour Mills Plc and the public have been advised to be cautious in the dealings with the company’s shares, going forward.

Dangote Flour closed at N11.75 in today’s trading session, up 9.81%.

Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs.He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor.Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan.If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

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    Business

    Customs Apapa Command generates revenue of N65.4 billion in April

    This indicates a 64% increase in collection and an unprecedented record that has never been achieved in the history of Apapa Area Command.

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    Border closure: Amid N5bn daily revenue, Customs officials lament allowance slash  

    The Nigerian Customs Service (NCS) Apapa Area Command has announced a revenue of N65,463,398,355.85 for the month of April—an increase of N25,585,561,139.92 compared to the same period last year.

    This was disclosed by Comptroller Ibrahim Yusuf, Area Controller of Apapa command, in a press briefing on Thursday.

    What Ibrahim Yusuf is saying

    “This indicates a 64% increase in collection and an unprecedented record that has never been achieved in the history of Apapa Area Command.

    In line with the provision of extant laws, trade guidelines and enforcement of government fiscal policy measures, the command was able to further strengthen its anti-smuggling operations against economic saboteurs through credible intelligence-driven operations.

    This led to the seizure of 4×40 feet containers laden with unregistered pharmaceuticals (674 cartons of tramadol tablets in 225mg and 120mg, and 805 cartons of codeine syrup in 100ml) at APMT and SIFAX 3 bonded terminal respectively.

    Other items seized in the period under review include: two containers of unprocessed wood and one container of scrap copper wire,” he said.

    He added that the progress the Apapa Command made in the month of April was possible due to the resilience of the officers, citing that the Command had taken steps to ensure efficient revenue collection by creating an enabling environment for legitimate businesses to thrive.

    What you should know

    Recall Nairametrics reported that the Nigeria Customs Service (NCS) Apapa Command stated earlier that it generated a revenue of N159.58 billion in the first quarter of 2021.

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    Business

    Why prices of Iron Ore, others may rise soon

    The underdeveloped mining of iron ore in Nigeria has led the nation to import the mineral which can be produced locally.

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    Iron ore is an important commodity currently in high demand, due to population and infrastructure growth in developing countries, especially Nigeria.

    The underdeveloped mining of iron ore in Nigeria has led the nation to import the mineral which can be produced locally. This development is expected to lead to an increase in the price of the commodity, as the nation relies solely on imported iron ore.

    Why is the increase imminent

    A surge in steel consumption is certain, as the world emerges from its pandemic-induced slump. This is set to drive iron ore to an unprecedented high as the biggest miners struggle to keep up with the frenzied pace of demand.

    An Estate Surveyor and Developer, Tunji Lawal, told Nairametrics that expectations are that benchmark prices can get to $200 a ton – topping the record $194 hit more than a decade ago.

    According to him, this is happening as Chinese steel producers ramp up production in defiance of government attempts to rein in output to control the industry’s carbon emissions.

    He said, “That’s tightening an iron ore market that hadn’t fully recovered from a supply shock more than two years ago.

    Iron ore prices could go higher in the short-term and exceeding $200 a ton is definitely possible and that will also push the price up in Nigeria. The price here, which is about N325,000/ton (8mm), is bound to go northward and may increase by N100,000 within a month.”

    He added that the increasing demand had been boosting steel prices from Asia to North America.

    Hotflex

    The hike is not limited to steel, as other building materials are also expected to rise further.

    Meanwhile, Dangote Cement, which increased from N2,600 to N3,800 barely a month ago, stands at N4,000/bag and still counting. The price may rise over N4,000 depending on market forces.

    Lafarge Cement and BUA Cement also increased from N2,400 and N2,250 to N3,600 and N3,250 respectively, within the same period. Their prices may also rise further.

    Tunde Oluwole, a fellow of the Nigerian Institute of Builders, explained that the development was caused by high-interest rates, inflation, increasing exchange rate and scarcity of forex in the country.

    He said, “The increasing prices in Nigeria is a result of the combined effects of high-interest rates, devaluation of the naira, inflation, and non-effective distribution network of the materials.”

    What you should know

    The mining of minerals in Nigeria accounts for only 0.3% of its gross domestic product, due to the nation’s overdependence on its vast oil resources.

    China accumulated a majority of the global iron ore imports in 2019, with a 69.1% share of total global imports. Japan followed behind distantly with a 7.5% share of iron ore imports.

    Jaiz bank

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