TheCable

The management of Dangote Noodles Limited says it has sold two of its production lines in Ikorodu and Calabar to De United Foods, makers of Indomie noodles.

NAN reports that the transaction is valued at N3.75 billion.

De United said it has signed an agreement with Dangote Noodles to buy the plants. It would also buy stock worth N383.94 million.

The deal comes after Dangote sold a small stake in its cement business to foreign investors in a one-off stock market deal valued at N27 billion.

Dangote Flour Mills said it wanted to quit noodles manufacturing to focus on pasta and flour production.

According to NAN, De United has a market share of around 70 percent of the Nigerian noodle market and is seeking to consolidate the sector.

Dangote Group, which has interests in agriculture, real estate and truck assembly, bought back the flour unit it sold to Tiger Brand, a South African company, for $1 in 2015 after the company posted losses.

Shares of Dangote Flour Mills have more than doubled so far after rising by 276 percent in 2016.

Dufil Prima Foods, the parent company of De United Foods, is a privately held company set up over two decades ago. It has grown to become the largest pasta maker in West Africa.

De United said the transaction had been approved by both companies and the regulators.

A banking source close to the deal said that De United would continue to produce noodles under the Dangote brand for two years after the acquisition.

In July, Dufil Prima Foods said it would raise N40 billion in the local debt market to broaden its funding base.