The bid by Dangote Industries Limited (DIL) to buy Tiger Brands, the Nigerian subsidiary of the biggest food manufacturer in South Africa, has been sealed as Tiger Brands Monday announced that it has agreed to sell its 65.7 per cent shareholding in its Nigerian unit, Tiger Brands Consumer Goods (TBCG) to DIL for a nominal $1.
A statement by TBCG said DIL would provide TBCG with an immediate cash injection of approximately R700-million, sufficient capital “to stabilise the business and place it on a sustainable path”.
In return, Tiger would sell its 65.7 per cent shareholding in TBCG to DIL for $1 and write off around R700-million in shareholder loans and settle TBCG debt to the tune of another R400-million.
The transaction, the statement said, is subject to regulatory approvals and would “ensure that TBCG is maintained as a viable going concern, able to retain its employees and meet its obligations to its stakeholders”.
Tiger Brands, which had been facing financial challenges, said last month that it had decided to stop funding the loss-making unit and opted for its sale.
Tiger Brands last October, bought a controlling 63.5 per cent stake in Nigeria’s pasta, noodle and flour manufacturer Dangote Flour Mills (DFM).
The Dangote deal was its biggest acquisition to date outside SA.
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