Dubai’s Abraaj Group has announced a partnership agreement with French food giant Danone to conduct a joint acquisition of Ghanaian dairy interest, Fan Milk International, in a transaction valued at more than $360m.
Fan Milk is an Accra-based manufacturer and distributor of frozen dairy products and juices that posted $160 million in West African sales in 2012. Since its establishment 50 years ago, the company has grown rapidly in Ghana, Nigeria, Togo, Burkina Faso, Benin and Côte d’Ivoire.
Arif Naqvi, Abraaj Group founder and CEO, said: “The acquisition of Fan Milk represents the largest FMCG private equity transaction in Sub Saharan Africa, outside of South Africa, and we look forward to accelerating the penetration of Fan Milk’s portfolio across West Africa.”
The combination of Abraaj’s investment insight and local presence on the African continent with Danone’s fresh dairy expertise holds major potential for Fan Milk’s market growth.
Emmanuel Faber, Danone Co-CEO, added: “Fan Milk is a company with a unique business model driven by a neighbourhood sales and distribution platform working through 31,000 independent vendors. Danone is already present in North and South Africa, and with this major step we will now be able to develop the dairy product market in West Africa.”
The Abraaj Group previously won a competitive process to acquire 100% of Fan Milk through one of its funds in June 2013. Abraaj and Danone will now respectively acquire a 51% and 49% stake in Fan Milk International, though Danone may acquire a controlling stake in the future.
The partners laid out expectations for the completion of the transaction by the end of 2013.
Fan milk was established in Ghana in the mid-50s by Danish entrepreneur Erik Emborg. In spite of three decades of turmoil punctuated by coups d’état, the firm expanded, setting up operations in Togo in 1985, and exporting to Benin 1992 and Burkina Faso four years later.
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