Aliko Dangote, Africa’s wealthiest individual plans to merge his sugar, salt, and rice businesses to create a single, more efficient entity, has hit a snag due to regulatory issues.
This move would have allowed Dangote Sugar, Nascon Allied Industries, and his rice company to combine resources, gain better access to capital, and increase value.
Nascon Allied Industries announced in a filing that the Securities and Exchange Commission (SEC) has put the merger on hold due to concerns about Dangote Rice Limited’s current operational status.
The SEC’s review came with comments and recommendations, indicating that the companies need to address these issues before moving forward.
The plan to merge the businesses was first announced in July, and the companies had received acceptance from shareholders.
The goal was to consolidate and strengthen the group’s market position, allowing them to capitalize on future opportunities in the food industry.
Interestingly, BUA Group, a major competitor of Dangote Industries, successfully consolidated its sugar, rice, flour, pasta, and edible oils units into a single firm, BUA Foods, in December 2021.
BUA Foods has seen significant growth, with its market value increasing from N720 billion to N6.8 trillion in less than four years.
If the Dangote companies meet the necessary conditions and complete the transaction, Dangote Sugar and Nascon Allied Industries will be delisted from the Nigerian Exchange (NGX).
They will then be relisted under a single name, creating a more streamlined and robust entity.
