By Janice Kew
(Bloomberg) — Unilever, whose detergents and deodorants are used by 2 billion consumers daily, plans to raise its stake in its Nigerian unit to as much as 75 percent to benefit from expected economic growth in Africa’s most populous nation.
The move “demonstrates our commitment to the Unilever Nigeria business and confidence in the long-term growth prospects of the company and consumer goods sector in Nigeria,” Bruno Witvoet, executive vice president of Unilever Africa, said in a statement on the company’s website.
Unilever wants to raise its 50.05 percent stake in Unilever Nigeria Plc, with the parent company buying as many as 944.5 million shares at 45.50 naira each. That’s a premium of 34 percent to Unilever Nigeria’s closing share price on Monday. The deal, at the intended offer price and with maximum acceptance, is valued at about 200 million euros ($218 million), Unilever said. Unilever intends to keep the Nigerian company’s listing on the local stock exchange.
Nigeria’s economic growth may slow to 4.8 percent this year from 6.3 percent in 2014, the International Monetary Fund said March 5. The cut in the growth forecast comes as the West African nation’s dependence on oil revenue has left it struggling from the decline in crude prices.
Unilever’s proposal is still subject to approval from the Nigerian Stock Exchange and the Nigerian Securities and Exchange Commission. Citigroup Global Markets Ltd. and Chapel Hill Advisory Partners Ltd. are acting as financial advisers to Unilever.
