UAC of Nigeria Plc yesterday, November 20, 2025, held one of its most anticipated investor and analyst briefings in years, its first major public engagement since announcing the landmark N182.4 billion acquisition of C.H.I Limited (CHI) from Coca-Cola.
The event, held in Lagos, brought together shareholders, analysts, and industry observers seeking clarity on how UACN financed the country’s biggest consumer-goods acquisition in recent times and what the deal means for its long-term strategy.
From the presentations given by Group Finance Director, Funke Ijaiya-Oladipo, and Group Managing Director, Fola Aiyesimoju, one message was clear:
UACN believes it has bought “a wonderful business at a fair price,” with a clear roadmap for unlocking massive value from it.
Funding the deal: The SPV, the bridge loan and the 83:17 debt–equity split
The Group Finance Director’s presentation provided the clearest look yet at how UACN assembled the war chest needed for the acquisition.
UACN created a wholly owned Special Purpose Vehicle (SPV), UAC Food and Beverage Company Limited, to execute and finance the acquisition.
The SPV became the legal buyer of CHI, enabling a clean transaction structure and swift fund mobilization.
According to the Group Finance Director:
“For us to do this and execute the transaction efficiently, we set up a newly incorporated special purpose vehicle, which is 100% owned by UAC. It was called UAC Food and Beverage Company Limited and that company was the acquisition and financing vehicle.”
This SPV structure allowed UACN to house the debt, receive bank financing, and transition CHI’s ownership without operational disruptions.
How the N182.4 billion was funded
The acquisition was financed through a heavy but deliberate reliance on bank debt.
- N30.8bn (17%) came from UACN’s own cash reserves.
- N151.6bn (83%) came from banks, structured as a 12-month USD bridge loan.
Because Coca-Cola required dollar payment, UACN hedged the entire exposure, absorbing hedge costs but avoiding FX risk volatility at the point of transaction.
Ijaiya-Oladipo emphasised that UACN had already secured a long-term refinancing path:
- A fully underwritten 7-year Naira loan, and
- A N150bn SEC-approved bond programme to tap the capital market as interest rates decline.
Why UACN moved now:
In his presentation, the GMD explained why the company considered this the right moment to strike.
CHI is a 45-year-old business and had only been sold once before, when Coca-Cola acquired it between 2016 and 2019.
Aiyesimoju told the audience:
“If you don’t buy it now, it may be another 45 years before you see the opportunity again.”
He noted the challenging economic environment in recent years created the perfect buying window:
- Company valuations were depressed,
- Global players were rethinking exposure to emerging markets,
- UACN’s balance sheet was strong enough to act boldly.
“Many companies were leaving. Prices were cheap. We thought it was a great opportunity to pounce.”
Strategic fit or not?
The acquisition instantly expands UACN into three high-growth markets where it previously had zero presence:
- Drinking yoghurt
- Evaporated milk
- Fruit juice and nectars
CHI’s brands—Chivita, Hollandia, Capri-Sun, and SuperBite—now join UACN’s existing stable of legacy brands.
The GMD said:
“We’ve added three new engines. Our core business was already growing fast—and now we’ve added yoghurt, milk, and juice.”
CHI also brings one of the largest aseptic beverage factories in sub-Saharan Africa, 52 SKUs, and nationwide distribution.
The value creation plan:
This was the most analytical segment of the management’s briefing.
CHI currently operates at a 6% margin. UAC Foods, a comparable business, improved its margin from 1% to 15% within four years.
For CHI, the GMD was blunt:
“By far the single biggest focus for next year is taking that six to fifteen.”
With CHI now a N500 billion revenue business, every margin point is worth N5 billion in profit. This means the total opportunity is approximately N45 billion.
Risks: FX pressures and CHI’s inventory
While the CHI acquisition strengthens UACN’s growth story, management made it clear that the deal is not without risks.
Two issues stood out in the briefing: exposure to foreign-exchange pressures and CHI’s unusually high inventory levels.
- CHI relies heavily on imported raw materials, especially milk powder and juice concentrate. Because Nigeria does not produce these inputs locally, CHI’s cost structure is highly sensitive to FX volatility, which can instantly inflate production costs, tighten cash flow, and complicate supply planning.
- The second concern is CHI’s exceptionally high inventory position. The company holds almost 220 days of stock, far above 60–90 days typical for efficient FMCG operators. Such long inventory cycles trap cash, increase financing costs, and heighten the risk of spoilage or obsolescence.
Recognizing these challenges, management outlined how it intends to tackle them head-on.
On FX risk, the GMD emphasized UACN’s experience managing similar exposure in its paints business:
“Nigeria doesn’t produce enough raw milk powder or juice concentrate, so it has to be imported. But our paint business has a very similar characteristic, and as the Naira devalued from N360 to N1,600, our margins increased.”
On inventory, he described the issue as both a problem and an opportunity:
“At the end of last year, this company kept almost 220 days of inventory. We think it is excessive… but as we bring that in line, meaningful cash will be unlocked. It’s a risk—but also an opportunity.”
Impact of the CHI deal on UACN’s financials
The financial impact of the CHI acquisition is immediate and far-reaching. With CHI now consolidated into its books, UACN shifts almost overnight from a mid-sized consumer company to one of Nigeria’s largest FMCG groups.
Data from the investor presentation proforma income statement – LTM ended September 30, 2025, show how dramatic the transformation is:
- Group revenue jumps from N223 billion to N717 billion, driven by CHI’s N493 billion contributions.
- EBITDA rises from N25bn to N67bn, reflecting the enlarged scale and strong profitability of CHI’s beverage and dairy operations.
- Packaged foods and beverages now account for 85% of total revenue, making the enlarged UACN primarily a food-and-beverage business.
CHI’s categories, juices, evaporated milk, yoghurt, snacks, and ready-to-eat pastries—now sit alongside UACN’s legacy brands, creating a broader, more competitive portfolio across Nigeria’s mass consumer market.
Capturing the magnitude of this shift, Group Managing Director Fola Aiyesimoju remarked:
“We have been growing very fast. CHI has accelerated that growth, but we remain hungry and ambitious.
With this acquisition, we have tripled our scale, deepened our FMCG focus, and positioned ourselves to unlock up to N45–N50 billion in additional profit. It marks one of the most significant financial transformations in our 146-year history.”
UACN’s plan to unlock N45–N50 billion in addition is striking.
With equity raises off the table and management opting to deleverage through internal cash flow, any profit improvement goes straight to EPS.
The stock has already gained 117% YTD, lifting UACN’s market value to N200 billion and pushing its P/E to around 26, well above the industry average, a sign that the market is already pricing in stronger earnings ahead and as such UACN has to deliver.
