JOHANNESBURG (Reuters) - South African consumer goods group Tiger Brands (TBSJ.J) is offering to buy out some minority shareholders in Nigeria’s Dangote Flour Mills DANGFLO.LG as it expands in fast-growing African markets.
Earlier this year Tiger Brands bought a 63 percent stake in the flour and pasta maker in its third and biggest deal yet in Nigeria, Africa’s most populous country and second-largest economy, which is seen as a growth area for consumer and food products.
Owner Aliko Dangote’s holding firm Dangote Industries Ltd kept a 10 percent shareholding in the flour mill after Tiger Brands’ purchase.
Tiger Brands said in a presentation on its full-year earnings that it is making an offer to minorities in Dangote Flour, which is expected to be completed by March next year.
“We will go up to a maximum of 70 percent in total, leaving the balance in Nigerian hands,” Tiger Brands’ chief executive Peter Matlare told Reuters after the presentation.
Tiger Brands, a maker of bread, breakfast cereal and energy drinks, expanded outside its home base last year with acquisitions in Nigeria and Ethiopia.
Matlare said the company will seek acquisitions in Africa, as well as growing its own business.
Tiger Brands posted a 7 percent rise in full-year earnings, helped by higher prices. It said diluted headline earnings per share for the year to end September reached 1,654.2 cents from 1,545 cents last year.
Headline earnings, the main profit gauge in South Africa, exclude certain one-off items.
The company said revenue rose 11 percent to 22.7 billion rand ($2.56 billion). It declared a final dividend of 555 cents per share.
But the company said it expected 2013 to be a challenging year as consumers remain under pressure, with economic growth sluggish, unemployment high and inflation accelerating.
Tiger Brands shares were down 1.5 percent at 273.67 rand at 1055 GMT.
($1 = 8.8595 South African rand)
Reporting by Olivia Kumwenda; Editing by Ed Stoddard and Louise Heavens