By THE AFRICA BAZAAR Staff Writer
France’s Danone and Abraaj Group, a private equity firm announced on Thursday a partnership agreement that allows Danone to own stake in Fan Milk International, which previously was 100 percent acquired by the Abraaj group earlier this year.
According to the agreement, Abraaj and Danone will now respectively acquire a 51 percent and 49 percent stake in Fan Milk International, with Danone gradually acquiring a controlling stake in the business in the coming years.
The partners expect to close the deal by the end of the year.
The deal represents a major step in Danone’s expansion in Africa.
“Fan Milk is a company with a unique business model driven by a neighborhood sales and distribution platform working through 31,000 independent vendors. Danone is already present in North and South Africa, and we will now be able to develop the dairy product market in West Africa,” said Emmanuel Faber, Danone’s co-chief operating officer.
The companies said the partnership, combination of Danone’s expertise in the fresh dairy category alongside Abraaj’s 20-year investment experience, insights and local presence on the African continent, will boost Fan Milk’s growth in a market with major potential.
Arif Naqvi, founder and group chief executive of The Abraaj Group said, “The acquisition of Fan Milk represents the largest FMCG private equity transaction in Sub Saharan Africa, outside South Africa. We look forward to partnering with Danone in order to accelerate the growth and penetration of Fan Milk’s portfolio of leading consumer food brands across West Africa.”
Fan Milk, a leading manufacturer and distributor of frozen dairy products and juices in West Africa has approximately $165.7 million (€120 million) sales in 2012. Since its establishment over 50 years ago, Fan Milk has grown rapidly through a unique distribution network and currently operates in the markets of Ghana, Nigeria, Togo, Burkina Faso, Benin and Ivory Coast.
The Abraaj group had previously announced its agreement to acquire 100 percent of Fan Milk through one of its funds in June 2013.