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Honeywell Group looks to 2022 as it completes ₦80 billion deal

As the curtains wind down on 2021, Honeywell Group (HGL)  is looking well into the future after reaching an agreement with Flour Mills of Nigeria (FMN) to bring together FMN and Honeywell Flour Mills Plc. (HFMP), a portfolio company of HGL, in a deal worth N80 billion. This deal will see HGL transfer ownership of a 71.69% stake in HFMP to FMN.

As the deal closes, Honeywell Group says it plans to continue growing its investment portfolio by consolidating in sectors where it already operates, such as real estate, energy, financial services and infrastructure. It also plans to unveil a few strategic initiatives in due course.

This transaction, subject to regulatory approval, essentially brings together two food manufacturing giants that have served Nigeria well over the years and are now looking to expand their capacity and services, but as one body. This marriage, if you will, creates a launchpad for the new singular entity to go all out in helping Nigeria tackle food insecurity and boost food production, enough to cater to a growing population of more than 200 million.

The deal also provides a platform for Nigeria to continue its strategic push and positioning as a regional superpower, even as the African Continental Free Trade Area (AfCFTA) opens up a new dimension of commercial and cultural relations across the continent.

Over the years, Honeywell Group has invested heavily in major sectors of Nigeria’s economy, including food, telecommunications, real estate, energy, infrastructure, and financial services. The group has also shown through the years that it is committed to creating trans-generational value, building and investing in a number of companies that have become market leaders in their sectors.

A prime example is Honeywell Flour Mills Plc which only last year recorded its highest-ever revenue, crossing the much-coveted N100 billion mark. Through consistent investment in infrastructure, the company has grown from producing 70,000 metric tonnes per annum to producing 835,000 metric tonnes per annum, an increase of more than 1000%.

Explaining the strategy behind this deal, Honeywell Group Limited Managing Director Obafemi Otudeko said that it is in line with the evolution of Honeywell Group. “For over two decades,” he said, “we have supported Honeywell Flour Mills to build a strong business with a production capacity of 835,000 metric tonnes of food per annum. Following the transaction, Honeywell Group will be strongly positioned to consolidate and expand its investment activities, including as a partner of choice for investors in key growth sectors.”

It is worth noting that these kinds of deals often lead employees and outsiders to ask questions about job security. Honeywell has, however, allayed fears that that will happen. Speaking to the press, the company reassured the public that the deal will create a stronger business which will lead to more growth and create even more jobs in the future. It reiterated that there will be no material impact on the workforce or operations of either business. It even went as far as projecting that the deal will create more opportunities that will feed the new entity’s regional and continental growth aspirations both locally and internationally.

Once the deal goes through, the new combined entity, which is a product of more than 85 years of combined history, will have access to a wider pool of resources and talent to develop and improve upon a vast array of products in categories such as pasta, grain-based foods, sugar, oils, spreads and cereals.

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