Nestlé S.A buys additional shares in Nigerian subsidiary increasing its stake to 66.3%

Image Source: Nestle Central and West Africa

NIGERIA – Nestlé S.A, Switzerland, the parent company of Nestlé Nigeria Plc, has purchased 229,697 additional units in the shares of the company, increasing its ownership percentage of the Nigerian subsidiary to 66.30 per cent.

The breakdown of the transaction, shows that the purchase consideration for the additional units of Nestlé Nigeria shares at an average price of N1,249.65 (US$3.25) per unit is put at N287 million (US$745,000), reports The Punch.

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This is the third transaction made by the company in over 22 days, accumulating a total of 977,744 additional shares worth N1.165 billion (US$3.02m).

As of June 30th, in line with the shareholding analysis of Nestlé Nigeria in its half-year financial results, the company had exactly 792,656,252 shares outstanding, with Nestlé S.A being the majority shareholder with 524,559,457 units, which amount to 66.18% of the total shares of the company outstanding.

Some operators in the Nigerian capital market, highlighted that the recent purchase of additional shares by Nestlé S.A was expected and commendable.

Shareholders, under the aegis of Progressive Shareholders Association of Nigeria, said the company had the right to increase stake in the firm if minority shareholders were willing to sell since it was not crossing the threshold allowed by the regulators to remain a quoted firm, reports The Punch.

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“It is expected for the foreigners to take the holdings since Nigerian shareholders are offering to sell and no domestic investor has the ability to purchase.”

Boniface Okezie – The National Coordinator Proactive Shareholders Association of Nigeria (PSAN)

Multinationals increasing stake in Nigerian subsidiaries

Recently multinationals seem to continue to tighten shareholding control on their Nigerian subsidiaries with Heineken and Unilever also undertaking share purchase in their subsidiaries.

The National Coordinator, PSAN, Boniface Okezie, in an interview with the Punch, said Nigerian shareholders were willing to sell because of the economic hardships being witnessed in the country.

He said, “It is expected for the foreigners to take the holdings since Nigerian shareholders are offering to sell and no domestic investor has the ability to purchase.

“I don’t see it as a mission to take over the company; I believe it is a morale booster to the Nigerian company. The regulators are watching and they will react if they are crossing the threshold.”

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