South African company in talks to buy Dangote flour

South Africa’s biggest consumer foods maker Tiger Brands said on Monday it is in talks with Dangote Industries over the Nigerian conglomerate’s stake in its flour milling unit.

The talks come amid reports that Tiger Brands is bidding for an 80 percent stake in Dangote Flour Mills, which makes pasta and flour in Africa’s most populous country.

Shares in Dangote Flour Mill jumped 4.64 percent to N4.96 by 2:56PM, their highest level in more than six weeks.

Tiger Brands was little changed at 288.21 rand.

Johannesburg-based Tiger Brands did not give further details, saying developments would be reported to shareholders.

Buying all or part of Dangote Flour Mills would give the maker of bread, breakfast cereal and energy drinks a substantial presence in the Nigerian food market.

Dangote has the milling capacity of 4,800 metric tons per day, producing wheat flour, confectionery flour, bread flour and pasta semolina

Banking and company sources told Reuters that Tiger Brands has already done a due diligence and FirstRand’s investment arm Rand Merchant Bank is its advisor.