Nestle S.A increases its share holding in Nigerian unit to 66.5% after purchase of additional shares

Image source: Nestle

NIGERIA – Nestlé S.A, has acquires 105,569 additional shares in its Nigerian subsidiary, Nestlé Nigeria Plc worth N147.8 million (US$376,000).

According to reports by Naira Metrics the acquisitions were undertaken in two different transactions i.e., on 11th December the company purchased 63,700 units while 12th December 41,869 units at a price of N1,400 (US$3).

This comes days after the consumer giant on 2nd, 4th and 9th December 2020, acquired more shares of 253,965, 433,529 and 80,448 respectively, totalling to 767,942 ordinary shares.

Prior to that, the parent company on the 29th of November 2020 purchased a total of 666,596 unit of its Nigerian subsidiary in a deal worth N933.95 million (US$2.3m).

Nestle Nigeria Plc reported a 0.66% rise in revenue with to N212.7 billion (US$554m) for the nine months ended 30 September 2020

The purchase of the shares further cements the position of Nestlé S. A’s as the majority shareholder of the company.

In line with the information contained in its financial statements of the period ended 30th September 2020, the Nestle Nigeria had 792,656,252 shares outstanding, with Nestlé S.A being the majority shareholder with 525,537,201 units representing 66.30% of the total shares of the company outstanding.

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Hence, with the previous acquisitions and the recent acquisition of 105,569 additional units, Nestlé S. A’s ownership percentage of Nestlé Nigeria is now put at 66.5%.

The multinational company has been recently raking in more investments in the Nigerian unit for exchange of shareholding with some operators in the Nigerian capital market, highlighted that the move was expected and commendable.

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.

“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,” he indicated.

Nestle Nigeria Plc reported a 0.66% rise in revenue to N212.7 billion (US$554m) for the nine months ended 30 September 2020.

However, its gross profit fell to N90 billion (US$229m) in 2020 from N96.3 billion (US$245m) in 2019 due to rise in cost of sales which increased disproportionately with the marginal rise in revenue.

The cost of sales rose by 6.7% to N122.7 billion (US$312m) representing 57.7% of the total revenue for the nine months.

Its profit after tax dipped by 13% to N31.9 billion (US$81.2m) in the nine months under review from N36.8 billion (US$93.6m) in 2019.

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