UAC of Nigeria Plc has confirmed that its acquisition of CHI Limited, makers of the popular Chivita and Hollandia beverage brands, is fully financed and on track to close within the next two to four months, subject to regulatory approvals.
The company’s Group Managing Director and CEO, Fola Aiyesimoju, disclosed this during a recent investor call, where he assured stakeholders that UAC has secured the funds through a mix of internal resources and bank financing.
“This was not an opportunistic deal,” Aiyesimoju explained. “We had planned for this, years in advance, ensuring our foundation—people, IT systems, risk controls—was strong enough to manage a larger business. The acquisition fits perfectly into our long-term strategy.”
Although UAC declined to reveal how much it is paying for Chi, the move comes against the backdrop of a strong balance sheet.
“We are still constrained in what we can disclose at this stage,” said Aiyesimoju. “This transaction is subject to regulatory approval and involves a private company, so unfortunately, there are aspects I cannot comment on.”
UAC reported approximately N46 billion in cash and bank balances as of its latest financials, although its free cash flow stands at around N8.7 billion, implying that the company is leaning on debt to complete the deal.
Aiyesimoju reiterated that the acquisition aligns with a plan first outlined in 2022, when UAC began mapping out parameters for strategic growth through acquisitions, focused specifically on businesses and sectors the company is familiar with and within the Nigerian market.
“We decided to focus on the familiar acquisitions in Nigeria and in sectors we understand well,” he said. “Chi fits that playbook.”
CHI, the beautiful bride
Chi Limited, one of Nigeria’s largest fast-moving consumer goods (FMCG) companies, owns a range of brands with dominant market share in fruit juices, dairy drinks, and snacks.
Its flagship brands—Chivita and Hollandia—are household names across the country.
- The company was previously owned by The Coca-Cola Company, which first acquired a 40% stake in 2016 and later completed a full takeover in 2019.
- According to Coca-Cola’s 2020 earnings report, the global beverage giant paid $257 million in cash (net of cash acquired) for the remaining 60% stake.
- However, it also stated that it took a write-down of $118 million in accounting loss after it revalued the acquisition of the original 40%.
Nairametrics estimates that Coca-Cola’s total outlay for the full acquisition likely came to around $500 million, or N180 billion at the then exchange rate of N360/$1. At today’s rate of N1,500/$1, the equivalent cost would be N750 billion.
In comparison, UAC’s total balance sheet currently stands at N161.4 billion, while its market capitalization is approximately N288.4 billion, offering a sense of the scale involved in acquiring a business like Chi.
While UAC has yet to disclose how much it is paying to take the business out of Coca-Cola’s hands, the deal reflects a broader shift in Coca-Cola’s Africa strategy, suggesting it will be focusing on owning and marketing its own products.
The company has increasingly leaned toward an asset-light model, choosing to divest manufacturing operations and focus on brand-building and distribution partnerships.
What you should know
With the acquisition expected to close within four months, Aiyesimoju says UAC is confident about the value it will unlock.
He pointed to potential synergies in distribution, supply chain efficiencies, and deeper market penetration.
“The brands in the Chi portfolio will complement our existing products and deepen our distribution capabilities. There’s a lot of work ahead, but we’re excited and ready.”
Market watchers will be paying close attention to the final regulatory approvals, further deal disclosures, and how UAC integrates the new acquisition into its operations over the coming quarters.
The announcement of the deal triggered a surge in UAC’s share price, which jumped by 60%, pushing the company’s market capitalization above N288 billion.
The stock is now up 497% year-to-date and has delivered an astonishing 1,900% return over the past five years, highlighting investor confidence in UAC’s growth story and strategic direction.
