NIGERIA – Presco Plc, a fully integrated oil palm processing firm in Nigeria is seeking to take full ownership of its competitor Siat Nigeria Limited (SNL), a subsidiary of Belgian group Siat SA.
According to a press release from the Nigerian Stock Exchange listed company, the transaction will concern all the shares of SNL held by Siat SA amounting to 7,330,965,143 for a unit price of N2.86 for a total cash consideration of N21 billion (US$50m).
The strategic move by Presco is aimed to drive sustained long-term growth and profitability of the company.
“The Directors of Presco have taken the strategic decision to propose the acquisition with a view to maximizing value for all shareholders and enhancing the operational efficiencies of the enlarged entity post acquisition.
“The acquisition will ultimately lead to reduced overhead and increased revenue through the exploitation of operational synergies across Presco and SNL,” stated Presco.
The decision to proceed with the acquisition will be taken by the minority shareholders of Presco since its capital is also majority owned (60%) by the Siat SA.
SNL was incorporated on 11 December 1991 as a wholly owned subsidiary of Siat SA.
In 2011, the company acquired the assets of Risonpalm, which comprised 16,000 hectares of old palm plantations, as well as the entire social and industrial infrastructure of the industrial oil palm complex from the Rivers State Government.
Currently, SNL operates from two estates in Rivers State, the Ubima Estate and the Elele Estate and over the last five years, has invested N6billion in developing its operational capacity.
Following the acquisition, Presco intends to gain in scope both upstream and downstream of the palm oil production chain to strengthen its presence on the Nigerian market, which is the largest on the African continent.
At the moment Presco has a mill capacity of 90 tons per hour and a 500 ton per day vegetable oil refinery, while SNL has a 60 ton mill which combined will increase the benefit of value added.
As a reminder, Presco owns 23,500 ha of industrial oil palm plantation in Edo and Delta States.
Nigeria consumes an average of 1.7 million tonnes of palm oil per year and is the leading producer of oilseeds on the African continent.
In the country, the government intends to achieve self-sufficiency in crude palm oil by 2027 as part of a new roadmap adopted in June 2019 at a total cost of US$500 million.
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