How Otukedo’s First Bank Debts Facilitated Honeywell, Flour Mill Merger

The business combination between Flour Mills of Nigeria Plc (FMN) and Honeywell Flour Mills Plc was fast-tracked by the humongous debt owed First Bank by Honeywell, The Star Nigeria has reported.

The Star reports that Flour Mills acquired the 71.69 percent stake of billionaire Oba Otudeko in the Honeywell Flour Mills Plc (HFMP), a portfolio company of Honeywell Group Ltd. (HGL).

The transaction is valued N80 billion, however, in the eyes of industry analysts was a takeover of Honeywell by Flour Mills Nigeria which is buying over the stakes of Otudeko in the company he founded.

Also, FMN has entered into agreement with the First Bank Holdings Company to acquire its 5.06 per cent equity stake in Honeywell Flour Mills.

Industry sources told The Star that the transaction is hinged on the debt crisis in the First Bank of Nigeria where Otudeko held a major stake.

Otudeko is said to be owing the bank billions of naira. GreenWhiteGreen GWG had reported how billionaire businessman, Otudeko was removed from the board of First Bank on account of the alleged indebtedness of his company to the bank.

Already, the Central Bank of Nigeria (CBN) has given the billionaire a timeline to pay his humongous debt to the bank.

One of the sources told The Star that First Bank’s investment in Otudeko’s Honeywell Flour Mills was influenced by the businessman.

Meanwhile, Flour Mill Nigeria FMN and Honeywell Flour Mills HFM have signed an agreement for the business deal, both companies said this in a statement posted on the website of the Nigerian Exchange Ltd. (NGX) on Monday.

“FMN and HGL today announced that they have signed an agreement for the proposed combination of FMN through its affiliates and Honeywell Flour Mills Plc (HFMP), a portfolio company of HGL.

“At a total enterprise value of N80 billion, HGL will dispose of a 71.69 per cent stake in HFMP to FMN.

“The proposed transaction will combine two businesses with shared goals and create a more resilient national champion in the Nigerian foods industry, ensuring long-term job creation and preservation,” said the statement.

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