After Launching Dangote Refinery, Africa’s Richest Billionaire Set to Unveil Dangote Foods
- Dangote Group is proposing a merger of three of its companies into Dangote Foods
- The companies are Dangote Sugar Refinery Plc (DSR), NASCON Allied Industries Plc, and Dangote Rice Limited
- The development will expectedly lead to more profit and diversified mega-corporation for the Group
- A Nigerian stockbroker tells Legit.ng that the Dangote Group must be looking to replicate what BUA Foods has done
Ravindra Singhvi, Group Managing Director and Chief Executive Officer of Dangote Sugar Refinery Plc has disclosed that three of its subsidiaries will be merged to form one big company.
He said subject to regulatory approvals, the proposed merger of Dangote Sugar Refinery Plc (DSR), NASCON Allied Industries Plc, and Dangote Rice Limited would be completed before the end of 2023.
Dangote Foods Plc will be the name of the mega-entity that will result from the proposed merger of companies of Dangote Industries Limited, two of which are already listed on the Nigerian stock market.
Source: UGC
Punch reports that Dangote Foods Plc is expected to overhaul the agriculture sector and ensure food security for the country. It is also expected to be a more profitable and diversified mega-corporation within the Dangote group.
This is coming after Dangote Refinery set a new date to begin operGroups after missing the initial date.
Merger to benefit the nation
Singhvi said that the proposed merger is crucial for the Group and the nation.
He added that it will positively affect every stakeholder, noting that the production of shareholder value comes first.
He also said when two companies merge, the merged entity grows as their shareholders become more prosperous and diversified.
Singhvi further stated that the combination will result in cost-saving synergies that will increase shareholder value. He predicted that the product lineup would be expanded, and the revenue source would be varied.
Singhvi said the proposed merger creates a sizable company with a variety of goods, including rice, sugar, and culinary seasonings (salt, tomato).
He claims it will also make a more comprehensive distribution capability possible.
He contended that massive entity distribution is feasible by merging many businesses. He also said there is a lot of synergy, which will help the company operate more efficiently.
If regulatory approvals are granted, Dangote Foods Plc, the new company that would emerge from the upcoming merger of Dangote Sugar Refinery, Dangote Salt, and Dangote Rice, would immediately begin operations.
In a notice submitted on behalf of Dangote Sugar, Temitope Hassan said,
“Dangote Sugar Refinery Plc (the “Company”) hereby notifies the Nigerian Exchange Limited and the investing public that the Board of Directors of the Company at its meeting held on July 28, 202,3 resolved to recommend the proposed merger between the Company, NASCON Allied Industries Pl,c and Dangote Rice Limited to the shareholders of the company for consideration and approval, subject to partiesagreeingn ong terms and conditions.
The company, NASCON & DRL hereinafter referred to as the Merging Entities are all subsidiaries of Dangote Industries Limited (the Group).”
In a telephone interview with Legit.ng, Usman Adbullahi, a stockbroker likens Dangote’s move to that made by BUA Foods about two years ago.
He said:
What the Dangote Group has done is to aggregate the different food processing ventures of the conglomerate into one entity. By so doing, they can operate as an entity under a single management and list on the stock exchange as one big company.
In January 2022, BUA Foods was listed on Nigeria's stock exchange. Its shares were widely patronised, and it quickly accelerated to becoming one of the few Nigerian stocks worth over one trillion naira.
This move by Dangote Group certainly looks like that made by BUA in 2022. I guarantee you that if that same strategy is applied in this case, Dangote Foods will quickly become a profitable stock on the exchange.
NNPCL shuns Dangote Refinery, swaps crude oil for loan with others
In an earlier report by Legit.ng, a Nigerian National Petroleum Company Limited (NNPCL) source revealed that the company signed crude oil contracts with several entities.
The development, it was gathered, prevented the company from initially meeting Dangote’s demand.
The Executive Director of Dangote Group, Devakumar Edwin, claimed in a Monday interview with S&P Global Commodity Insights that the NNPCL had committed its crude to other organisations.
Source: Legit.ng
