A statement on Friday, stated that it held 99.97 per cent equity in Niger Mills, and the proposed merger would facilitate the consolidation of the companies’ operations and processes into a single enlarged entity.
It added that the proposed merger would create a more efficient company, positioned to create potential savings through the optimisation of overhead costs, particularly administrative costs relating to maintaining two distinctive entities.
In a letter to the shareholders of Flour Mills, the company’s Chairman, Mr. George Coumantaros, explained that the merger would be achieved by the transfer of all of the assets, liabilities and undertakings of Niger Mills to Flour Mills in exchange for which ordinary shares of Flour Mills would be issued to the minority shareholders of Niger Mills.
It added that alternatively, a cash consideration in lieu of the allotment of the said Flour Mills shares would be paid to the minority shareholders.
The letter also explained, “Upon the merger becoming effective, all Niger Mills shares will be cancelled and Niger Mills will, thereafter, be dissolved without being wound up.”
Flour Mills also notified the Nigerian Stock Exchange that the boards of both companies had been in discussion and negotiation with regard to merging their respective businesses, adding that the proposed Scheme of Merger would be undertaken pursuant to Part XII of the Investment and Securities Act No. 29 of 2007.
“The board of Flour Mills believes that the enlarged entity will consolidate its position in the flour milling industry, accessing positive economies of scale and realising significant synergies through enhanced operational and administrative efficiency and a unified product delivery platform, thereby providing immense benefits to the shareholders and customers of Flour Mills,” the statement stated.
It added that a Federal High Court had directed that separate meetings of the shareholders of the merging entities be convened at a court-ordered meeting on February 20, 2013.
At the close of trading activities on Friday, Flour Mills’ share price rose by 4.9 per cent or N3.49 to close at N73.49 per share.