To stabilise its operation after the divestment of Tiger Brands, Dangote Noodles has been sold by Dangote Flour Mills to Dufil Prima Foods Limited, makes of Indomie Noodles.
As part of the deal, Dufil is expected to produce noodles under the Dangote Noodles brand name for the next two years using the production line. The company will phase out the brand name afterwards to its own.
Thabo Mabo, said the divestment is part of the strategic moves of Dangote Flour Mills to focus on its core pasta production activities, an area where the company has an upper hand.
Indomie is the largest maker of noodles in Nigeria with over 60% market share across the country. The acquisition of Dangote Noodles is expected to push its share of market to nearly 80%.
Confirming the deal, the Chief Executive Officer, Dufil Prima Foods, Deepak Singhal said the acquisition has been perfected to involve the entire asset of the company. Dufil will also be retaining substantial employees of Dangote Noodles while others will be paid off based on a negotiation with the workers union.
Dufil is not a public company and as such, the company will not reveal how much it paid for the acquisition. However, Dangote Flour Mills is expected to state the amount in its first quarter earnings result which is expected in few weeks from now.
In early part of 2016, Tiger Brands exited Dangote Flour Mills after the company complained of harsh economic conditions and huge losses that led to a huge depreciation of their assets. Aliko Dangote through his Dangote Industries bought back their shares to allow their exit from the company.
