Legit.ng journalist Victor Enengedi has over a decade’s experience covering Energy, MSMEs, Technology and the stock market.
Africa’s wealthiest man, Aliko Dangote, has temporarily halted his plan to merge his sugar, salt, and rice companies in order to enhance efficiency and strengthen consolidation.
This is according to a notification signed by Nascon Allied Industries’ company secretary, A.A. Samuel, and published by the Nigerian Exchange Limited.
Source: UGC
The integration of these entities would have allowed Dangote Sugar, Nascon Allied Industries (already listed on the Nigerian Exchange), and the billionaire’s lesser-known rice company to benefit from economies of scale, thereby increasing access to capital and enhancing overall value.
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However, the proposal did not meet a crucial requirement for the transaction to proceed, as stated in a regulatory filing by Nascon Allied Industries.
Nascon Allied Industries, known for its production of salt as well as spices and seasoning, indicated that the Securities and Exchange Commission (SEC) review included feedback and suggestions.
The statement part read:
“The suspension is due to the comments and recommendation of the Securities and Exchange Commission (“SEC”) centered around the current non-operational status of Dangote Rice Limited.”
This suggests that the three entities will need to reassess their plans in order to address these comments and recommendations to proceed with final approval.
The proposal for merging the businesses was initially announced last July, following which the merging parties presented the plan to shareholders for consideration.
These companies are subsidiaries of the larger Dangote Industries Limited, with Dangote Sugar stating that the transaction aims to consolidate and strengthen the Group’s market position, ultimately positioning it to seize future opportunities in the food industry.
Should the three Dangote companies satisfy the approval conditions and finalize the transaction, Dangote Sugar and Nascon Allied Industries will be delisted from the NGX.
At that stage, both companies, alongside Dangote Rice, will be relisted on the stock exchange under a unified name.
Source: Legit.ng
