Flour Mills of Nigeria (FMN) Plc and Honeywell Flour Mills Plc, two of Nigeria’s largest flour mills, disclosed an acquisition deal that will see the former purchase over 71.6% of the shares of Honeywell.
Honeywell shares are already up 9% during intraday trading ahead of the actual share price for the transaction being determined. Honeywell share price is up 183% YTD coming into this transaction while Flour Mills share price is up 13% YTD.
While the companies are yet to reveal the actual purchasing price for the transaction, we ponder on how the transaction will be paid for. Currently, both companies owe about N220 billion in external loans per their 2021 half-year results.
Honeywell currently has a debt balance of N78.5 billion and a cash balance of N27.3 billion according to its most recent results. This was the breakdown of its creditors per its 2021 audited accounts for the period ending March 2021.
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