Nigeria: Dangote to merge Salt, Sugar, and Rice Businesses into a single conglomerate

By InstinctBusiness Jul 19, 20230

NASCON Allied Industries Plc, the salt-making division of Dangote Industries Limited, will consider merging with two other food companies within the group during a forthcoming meeting of its board of directors later this month.

As per a regulatory filing on Thursday, this merger aims to bring together the salt-maker, Dangote Sugar (which owns the largest sugar refinery in sub-Saharan Africa), and Dangote Rice, creating a single entity.

While NASCON and Dangote Sugar are publicly listed in Lagos, Dangote Rice is not yet quoted. Dangote Industries Limited serves as the holding company for numerous enterprises, mostly owned by Aliko Dangote, Africa’s wealthiest individual.

This planned merger occurs approximately 31 months after BUA Group, the conglomerate’s primary competitor, announced a similar consolidation of its food businesses—rice, sugar, flour, edible oils, and flour—into a new entity named BUA Foods.

BUA Foods subsequently listed on the Nigerian Exchange and presently holds the title of Nigeria’s largest consumer goods company by market value. As of Thursday’s market opening, it was valued at over N2.4 trillion, with total assets of N649.6 billion as of March 31.

Abdul Samad Rabiu, the second-wealthiest individual in Nigeria and the fourth-richest person in Africa, exercises control over BUA Group.

On Thursday, Dangote Sugar and NASCON commenced trading with market capitalizations of N329.8 billion and N70.2 billion, respectively.

As of the end of March, the two companies held total assets valued at approximately N558.9 billion and N59.2 billion.

The Dangote Group’s most significant investment is its oil refinery in Lekki, Lagos, capable of processing 650,000 barrels per day. This refinery was commissioned in May and reportedly involved a cost of $19 billion.

Similarly, the BUA Group is currently constructing a refinery in Akwa Ibom State, expected to have a capacity to process 200,000 barrels of crude oil per day. The refinery is anticipated to be operational by 2025.