Olam International Ltd., a global commodities trader is consolidating its acquisition of major interest of wheat milling operations in Nigeria. It would be recalled that in April 2016, Olam had invested about USD150 million to set up two state-of-the-art animal feed mills.
The investment included poultry breeding farms and a hatchery to produce day-old-chicks in Nigeria. The full deal was closed for a total of USD272 million. It is part of the company’s acquisition spree which has seen it expending over USD2 billion worldwide.
Olam started out in Nigeria in 1989 with 2 members of staff. Today, Olam International Ltd is perhaps the world’s largest food commodities traders, is targeting more acquisitions next year after a $2 billion spree since late 2014 involving deals in cocoa, peanuts and wheat.
Sunny Verghese, CEO of Olam told Bloomberg that “We have enough dry powder to execute both our organic and inorganic growth strategy.
He added that “Going forward, our strategy is to do fewer transactions, but bigger and bolder transactions that can really move the needle.”
However, Olam has had its rough years. It would be recalled that that company came under attack from Muddy Waters LLC in 2012 over doubts about its finances.
Olam was saved by Temasek Holdings Pte., a state-owned Singaporean investment fund, took a controlling stake in March 2014 to fend off the short-seller.
With its bullish approach, Nigeria is poised to benefit from Olam’s bullish acquisition plans to move away from being a commodities middleman into an agro-allied and production company.