Dangote Sugar Set To Complete Takeover Of Savannah Sugar

The shareholders of both Dangote Sugar Refinery (DSR) and Savannah Sugar Company Limited (SSCL), both owned by Africa’s richest man, Aliko Dangote, will meet on July 9, to complete a merger deal.

The DSR had in 2019 sent a disclosure notice that the company’s board of directors recommended the combination of both businesses via a scheme of external restructuring.

Dangote had in February 2013 acquired 95% stake in SSCL, a move aimed at consolidating  the company’s dominance in the industry.
Dangote Sugar Refinery said in a statement on Wednesday that all regulatory approvals from both the Securities and Exchange Commission (SEC) and the court had been met, except approval from the stakeholders.

The details of the pending approval show that DSR would be “authorised to receive all the assets ((including all tax attributes, unutilised capital allowances, tax losses, withholding tax credits and any other tax refunds available subject to the approval of the FIRS), liabilities and business undertakings, including real property and intellectual property rights of Savannah Sugar Company Limited (“SSCL”) transferred by SSCL to the Company (pursuant to the Scheme of Arrangement between SSCL and its shareholders) upon the terms and subject to the conditions set out in the Scheme of Arrangement without any further act or deed.

The scheme also specified that the liabilities and business undertaken, including real property and intellectual property rights be transferred to the acquiring company.

According to the scheme, each of the 146,878,241 ordinary shares of N0.50K each in the share capital belonging to the DSR be issued and allotted to the shareholders of Savannah Sugar, “except for DSR.”

Based on the arrangement, the Scheme Shareholders of 162,756,968 ordinary shares in SSCL would be credited as fully paid at the”close of business on the terminal date.”

SDR also noted that legal matters including proceedings, claims and litigation matters pending or active, for or against SSCL would also be assumed by the DSR.

What It Means For Dangote Sugar

The merger will make Dangote Sugar Refinery the surviving entity as the entire shares of Savannah Sugar would be cancelled.

Also, the merger will boost the  market capitalisation of DSR which is currently N179.4 billion.

Dangote Sugar may also see a rise in its stock which is currently trading at N14.95 per share.

Savannah Sugar Company

Savannah Sugar is a private company located in Adamawa State, with a milling capacity of 50,000 tonnes per year. SDR produces refined sugar from its sugar cane farm which covers 6,750 hectares.