Friday, July 10,2020
Shareholders of Dangote Sugar Refinery Plc have approved the proposed acquisition of Savannah Sugar Company Limited.
This authorization for the merger between both firms was given at the company’s Extraordinary General Meeting (EGM) held in Lagos.
According to the investors, they are in support of the transaction because it will further enhance production capacity of the company and consequently raise its market dominance.
Dangote Sugar, which boasts of an install capacity to produce 1.44 million metric tonnes per annum, hopes to further conquer the sugar industry by leveraging on the Savannah Sugar’s sugarcane production capacity, and further cements its position as a top tier player in the space.
This was echoed by Chairman of the firm, Mr Aliko Dangote, who said Savannah Sugar has 32,000 hectares of land available for cultivation of sugar cane as well as milling capacity of 50,000 tonnes of sugar per annum and that upon the merger, further investments would be made to increase its land under cultivation.
He explained that the deal was considered as fair and reasonable by the board, expressing optimism that it would provide strategic opportunities and benefits for the company, employees and other stakeholders.
The Chairman noted that the business marriage between both organisations would make the new entity operate from the position of increased access to capital and then higher profitability.
Mr Dangote listed some of the benefits of the merger as being to consolidate the assets, intellectual property rights, operations, and business dealings of the Savannah Sugar into the Dangote Sugar; eliminate cost inefficiencies arising from duplication of resources and processes and improve the efficiency through more focused management of resources and position it as the biggest integrated sugar producer in Nigeria.
He further said the transaction would make the new company embarked on the next stage of the backward integration plan to revolutionise the sugar sub-sector of the nation’s economy.