April 23 (Reuters) – Commodity trader Olam International on Tuesday said it will buy Dangote Flour Mills Plc , as it looks to bolster its position in Nigeria’s wheat market.
Olam’s Nigerian unit, which holds a 0.1 percent stake in Dangote Flour Mills, will buy the rest of the company for an enterprise value of 130 billion naira ($425 million).
The deal expands Olam’s reach in the pasta market in Nigeria, as it looks to cash in on the growing demand of wheat-based products in the region.
The final deal value will be based on net debt and net working capital of Dangote Flour Mills, the company said in a statement.
Olam will fund the deal, which is on a debt free and a cash free basis, from internal cash resources and existing borrowing. ($1 = 305.9500 naira) (Reporting by Syed Saif Hussain Naqvi in Bengaluru; editing by David Evans)