Global food and agri-business Olam International has submitted a binding offer to acquire 100% equity ownership of Nigerian flour and pasta manufacturer Dangote Flour Mills (DFM) for NGN130bn ($361m) on a debt free, cash free basis.

The offer includes the acquisition of DFM’s five facilities engaged in flour and pasta manufacturing, in addition to its logistics capabilities such as access to Apapa and Calabar ports.

As per the proposed transaction, Olam intends to acquire all outstanding and issued shares of DFM that it does not currently own through a scheme of arrangement.

“We are confident about the growth prospects in this country and this acquisition, doubling our installed capacity here is evidence of our long-term commitment.”

Olam Grains and Animal Feed managing director and CEO K.C. Suresh said: “The acquisition of DFM supports the strategy of the grain and animal feed business, one of Olam’s prioritised platforms for growth, to expand our wheat milling capacity in high-growth markets, such as Nigeria.

“We are confident about the growth prospects in this country and this acquisition, doubling our installed capacity here is evidence of our long-term commitment to the Nigerian economy.”

The proposed acquisition is reported to be part of Olam’s strategy to strengthen its portfolio.

According to Olam, the demand for flour is expected to grow, due to the increased consumption of convenient and affordable wheat-based products, such as bakery snacks and pasta amongst Nigerian consumers.

Suresh further added: “Since 2010, when we first acquired Crown Flour Mills in Nigeria, Olam has invested in and grown a world-class wheat milling franchise with a strong regional footprint across four countries in Sub-Saharan Africa.”

Completion of the deal is subject to the approval of DFM’s shareholders, regulatory approvals and the sanction of the Federal High Court of Nigeria, as well as the absence of a material adverse change in DFM.