UAC of Nigeria Plc has received from the Federal Competition and Consumer Protection Commission the permission to proceed with its planned acquisition of CHI Limited, the maker of Chivita fruit juices and Hollandia Yoghurt, the company stated in a disclosure on Friday.
The approval from the industry regulator, which has now taken the transaction past its pivotal stage, leaves UAC to wrap up talks with Coca Cola towards finalising the buyout.
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“We are excited to officially welcome the Chivita|Hollandia (CHI Limited) team and brands into the UAC family, and we are eager to work together to build on their strong legacy and market leadership,” Fola Aiyesimoju, the group managing director of UAC, said in the statement.
“We look forward to a smooth transition and to seeing Chivita Hollandia (CHI Limited) thrive under UAC’s ownership,” stated Eeelco Weber, the CEO of CHI, in the same document.
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UAC first announced the deal at the end of July, describing it as “a strategic milestone” in its corporate growth plan.
The acquisition offers a bright spot to the conglomerate to expand the range of products within its packaged foods and beverage division, dominated by brands such as Gala and Supreme Ice Cream.
The scale-up plan of UAC’s food and beverage business, which it expects to accomplish by diversifying into new product lines, matches Coca Cola’s current push to keep its operations slim and more efficient by concentrating on its areas of strength and on brands that offer competitive advantage.
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Canadian-based Fasken Martineau and Templars provided legal advisory to UAC on the deal. Citi served as the financial advisor to Coca Cola, while Chicago-based McDermott Will & Emery acted as its legal advisor.
In the six months to June, UAC posted a 32.6 per cent rise in revenue to N110.4 billion from a year earlier, but saw net profit drop by 22.9 per cent from N9.5 billion to N7.4 billion.
Return on equity for the period stood at 10.1 per cent, down from 14.4 per cent at the end of last year.
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