Wilmar to buy over Nigeria-incorporated palm oil business from British joint venture partner for US$70 million
[SINGAPORE] Wilmar International is buying the remaining stake it does not already own in a Nigeria-incorporated palm oil business from its joint venture partner, British manufacturer PZ Cussons, for US$70 million.
Once its acquisition of the 50 per cent equity stake in PZ Wilmar held by the London Stock Exchange-listed company is complete, Wilmar will hold 100 per cent equity in the palm oil business, the group said on Wednesday (Jun 18).
This purchase comes as Wilmar intends to invest in the Nigerian palm oil sector, which offers 'significant opportunity' for growth in the food and nutrition business, given the country's strong market demographics with more than 200 million consumers, said the group's chairman and chief executive Kuok Khoon Hong.
'We are bullish on the long-term potential of Nigeria's palm oil sector, given its large and growing population and suitability for palm cultivation,' he said.
Wilmar intends to continue developing the upstream palm plantation and downstream businesses in Nigeria, he added.
The conditional acquisition is slated to complete in the last quarter of 2025, subject to relevant approvals, and will be funded by internal resources.
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It is not expected to have material impact on the consolidated net tangible assets and earnings per share of Wilmar Group, the parent company of Wilmar International, for the financial year ending Dec 31.
The transaction is not expected to have substantive impact on PZ Wilmar's people or operations, the group added.
PZ Wilmar was established in 2010 as a joint venture between PZ Cussons and Wilmar International, with each holding a 50 per cent stake.
It sells edible cooking oils under the brand names Mamador and Devon King's and owns minority stakes in two palm oil plantations in the country, which are majority-owned by Wilmar International.
PZ Wilmar's name will be changed once the transaction is complete.
The group clarified that PZ Cussons' subsidiary PZ Cussons Nigeria does not hold shares in PZ Wilmar and will not be affected by the transaction.
Shares of Wilmar fell to their lowest levels in more than five years at S$2.89 on Wednesday. As at 1.25 pm, it is trading 3 per cent or S$0.09 lower at S$2.92.
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