Aliko Dangote, Africa’s richest man, on Monday, announced his resignation from Dangote Flour Mills following South Africa’s Tiger Brands funding withdrawal.
Dangote resigned alongside Olakunle Alake, Asue Ighodalo and Arnold Ekpe immediately after the announcement, which may mean the end of DFM.
Tiger Brands, a South African consumer goods maker, revealed its decision to cease funding its Nigerian division as it undergoes major economic reviews.
“Tiger Brands has decided not to provide further financial support with respect to its investment in Tiger Branded Consumer Goods Plc of Nigeria,” the company said in a statement.
According to Reuters, Tiger Brands has not made money from Dangote Flour Mills (DFM) since paying nearly $200 million for a 65 percent stake in the firm back in 2012.
Though DFM is named after Dangote, his group’s equity stake in the firm is only 10 percent. Anthony Geard, an industry analyst with Investec Securities, said “without Tiger Brands injecting money, it is the end of the line for DFM”.
Dangote Group is investing heavily in the African cement industry, with a plan to build production factories in 18 African countries and Nepal. Tiger Brands has large equity stakes in leading Nigerian companies including Deli Foods and UAC Foods. Click to signup for FREE news updates, latest information and hottest gists everyday
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The dumbfounding part of this deal is why would tiger brands have paid $200m for shares in a company that was already going down? they decided to invest in a dying company but should have asked ' why is Dangote pulling out of Flour and not sugar or cement? its a question that investors should always ask themselves,now they have bougth stakes in dying brands like Mr Biggs & Dangote flour. if this brand folds up it would only be a little glitch in the flour market that is majorly in the hands of Honeywell and Flour Mills of Nigeria Plc. goodbye Dangote flour
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