The Abraaj Group, a leading investor operating in growth markets, said it has reached an agreement to acquire a 100 per cent stake in Fan Milk International (FMI), the leading manufacturer and distributor of frozen dairy products and juices in West Africa.

 

Established over 50 years ago, FMI possesses an impressive track-record of organic growth in West Africa where it has become the undisputed market leader in frozen dairy products. 

 

FMI currently operates through subsidiaries in the rapidly growing markets of Ghana, Nigeria, Togo, Ivory Coast, Benin and Burkina Faso.

 

The company has successfully built and controls a unique and fully integrated regional manufacturing and distribution cold chain network, as well as a broad portfolio of convenience food and beverage brands that reaches over 31,000 end-sales points. 

 

FMI, through its subsidiaries, currently sells over 1.8 million products on a daily basis across West Africa.

 

As per the deal, Abraaj will work alongside the company’s strong, locally experienced management team to tap the ongoing rise of the African consumer class, in FMI’s existing market reach of over 250 million consumers and beyond.

 

Abraaj Group founder and chief executive Arif Naqvi said this is a landmark deal for both African Private Equity and the Abraaj Group. 

 

"The considerable investment and growth plans we have for FMI mirror the scale and depth of investment opportunities that we believe are now abundant on the African continent. Africa is witnessing the rise of a burgeoning middle and consumer class, so the acquisition of FMI is an extremely exciting and compelling investment opportunity," remarked Naqvi.

 

"FMI’s portfolio of leading consumer food brands perfectly complements our African investment strategy. The Abraaj Group has now invested $2.2 billion into sixty-nine partner companies across Africa making us one of the most active, long term investors on the continent," he added.

 

Jacob Kholi, the partner of Abraaj Group in Africa, said: “Our relationship with and knowledge of FMI has been built up over many years, thanks to our twenty year, on the ground presence in Africa. This investment in FMI builds on our strategy of targeting both the African agri-food sector, as seen with our investment in Brookside Dairy, the largest dairy in East Africa, as well as the rapidly growing African FMCG sectors.”

 

“We’re excited for Abraaj to have led the largest ever FMCG private equity transaction in Sub-Saharan Africa, outside South Africa,” he stated.

 

FMI chairman Preben Sunke said: “Having started as a family business more than five decades ago, we are extremely proud to have built both a strong business and a platform on which to take the company further on the African continent.”

 

FMI’s range of frozen dairy and beverage products supply some of the world’s fastest growing consumer, youth and urban markets with projected private consumption growth rates ranging from 4.2 per cent to 9.9 per cent and GDP growth rates of up to 8.3 per cent across FMI’s core, target markets in West Africa, he noted.

 

The transaction is expected to close by the end of November this year. Freshfields Bruckhaus Deringer acted as legal advisors to The Abraaj Group. Norton Rose Fulbright acted as legal advisors to Fan Milk International.-TradeArabia News Service