The proposed merger scheme between Flour Mills of Nigeria Plc and Nigerian Bags Manufacturing Company Plc has received shareholders’ approval.
A statement by Flour Mills on Wednesday, said that the shareholders of both companies gave their approval during a court-ordered meeting.
The shareholders at the meeting said that the move to merge the companies and all their subsidiaries would strengthen the business structure of Flour Mills, especially as it owned 70 per cent of BAGCO.
The statement explained that 99 per cent of the shareholders voted in favour of the merger, adding that the proposed merger scheme was subject to the final approval of the Securities and Exchange Commission.
The National Coordinator, Independent Shareholders’ Association of Nigeria, Sir Sunny Nwosu, said that the shareholders were happy with the merger because it was a strategic plan to reduce duplication of functions since the three subsidiaries were wholly owned by Flour Mills.
He said, “We see the merger itself as a synergy building as it will reduce duplication of functions by these other subsidiaries, because at the moment, most of the functions are cross functions. So, it will definitely reduce expenditure as a result of the cross function and bring synergy.
“We are expecting that this idea will bring more money to us in terms of dividend to the shareholders, because whatever they are able to save from the duplication of functions will now go into FMN and increase its portfolios. That is our belief.”
The Group Managing Director of Flour Mills, Dr. Emmanuel Ukpabi, had earlier said that the proposed transaction was in furtherance of the company’s long-term growth strategy, which would involve significant capital expenditure.
This, he said, was demonstrated by the company’s recent investments in the food and agro-allied sectors of the Nigerian economy.
The merger, according to him, will help streamline operations, reduce administrative overheads, create synergies and improve efficiency. He added that it would be done in a manner to assure of the continuation of the BAGCO Group business model in the Nigerian market.