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Olam International Limited, a leading agribusiness company, has offered N130 billion (the equivalent of $362 million) to acquire Dangote Flour Mills (DFM), a division of Dangote Industries Limited. The bid by the Singapore-based agribusiness firm – which has operations in more than 60 countries and a market value of $4.5 billion – is seen as a move to expand its portfolio in West Africa.

Through its subsidiary, Crown Flour Mills, Olam International currently owns 5,113,229 shares of DFM. The offer is to acquire all the outstanding and issued shares of the flour and pasta making company. The bid was calculated on a debt-free basis and is payable in cash upon closing of the transaction. It will also be adjusted to account for net borrowings as of March 31, 2019, or any later date chosen by Olam and the board of DFM to arrive at the final price payable to equity shareholders.

In a statement released on Tuesday, DFM announced that the offer is subject to shareholders approval, regulatory approvals, the sanction of the Federal High Court, as well as the absence of a material adverse change in DFM. If the conditions are met, DFM would be delisted from the Nigerian Stock Exchange (NSE).

“We are confident about the growth prospects in this country [Nigeria] and this acquisition. Doubling our installed capacity here, is evidence of our long-term commitment to the Nigerian economy,” said K.C. Suresh, Managing Director and CEO of Olam’s Grains. “This acquisition is also part of a strategic shift toward areas that offer the most demand, including flour milling in West Africa.”

Founded in Nigeria in 1989 as a cashew nuts exporter, Olam International has grown to become a global food and agribusiness company. Its businesses include cocoa, coffee, cotton, edible nuts and spices and it is listed on the Singapore Exchange.

In 2012, Tiger Brands, South Africa’s leading consumer goods manufacturer, paid $200 million for a 63.35 percent stake in DFM. However, the South African FMCG company failed to return the flour and pasta company to profit, eventually selling it back to Aliko Dangote, the company’s eponymous founder, in December 2015 for $1.

Following the announcement of the Olam Internationl's offer, DFM’s shares on the NSE jumped 9.8 percent to N11.75 on Tuesday, raising the value of the firm to N58.75 billion. As at 13.00 GMT on Wednesday, the company's shares were trading at N12.90, up 9.79 percent from yesterday's close.