Speaking during the “Facts Behind the Acquisition” presentation at the Nigerian Exchange (NGX), the Group Managing Director of UAC of Nigeria Plc (UACN…
Speaking during the “Facts Behind the Acquisition” presentation at the Nigerian Exchange (NGX), the Group Managing Director of UAC of Nigeria Plc (UACN), Folasope Aiyesimoju, explained the thinking behind the group’s N182.4 billion acquisition of CHI Limited.
He described the deal as a rare and well-timed opportunity that aligns with UAC’s long-term strategy in the food and beverage space.
Aiyesimoju opened by illustrating the sheer scale of UAC’s operations.
He said, “We sell almost 2.5 million units, and more than a million litres of product every single day. Those products reach consumers in Sokoto, they reach consumers in Enugu, and they reach consumers everywhere in between.”
A rare, time-sensitive opportunity
According to Aiyesimoju, CHI Limited’s availability for purchase was itself a once-in-a-generation opening.
“Chi is 45 years old. It has been sold only once, from the founders to Coca-Cola. If we didn’t buy it now, it could be another 45 years before the opportunity returned,” he said. “And although this is a young management team, I doubt any of us will still be here in 45 years.”
He added that the macroeconomic backdrop was equally strategic. With valuations depressed during Nigeria’s tough 2023 economic cycle, UAC saw an opening.
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“When many companies were trying to leave and valuations were depressed, we saw the opportunity. If we had not struck when we did, the opportunity could have become too expensive,” he said.
Aiyesimoju noted that moderating inflation and rising growth now suggest that the operating environment in five years could be significantly better than in the recent past, reinforcing the rationale to buy during a downturn.
Why CHI fits UAC
The UAC chief described CHI as a textbook fit for the group’s long-standing focus on food and beverage. The company is anchored on iconic brands, Chivita, Hollandia and Capri-Sun (under license), and operates one of the most advanced beverage manufacturing plants in sub-Saharan Africa.
“Chi is an extremely well-run company. That combination of strong brands and operational excellence is what attracted Coca-Cola to acquire it between 2016 and 2019,” he said.
Its factory produces over 52 SKUs and adheres to global quality standards. Its distribution system, he added, “rivals, and now complements, UAC’s,” ensuring that the promise of quality is matched by availability across the country.
Aiyesimoju revealed that due diligence reaffirmed the strength of CHI’s management team. “The biggest surprise since the acquisition is positive: the management depth and quality are even higher than we expected. It is a huge compliment to UAC.”
Dominant market positions
CHI brings four major product categories under UAC’s control: Chivita, which holds a 38 percent market share, and Hollandia, which has a 33 percent share in the evaporated milk space.
In the drinking yoghurt space, it was also noted that CHI is the undisputed leader with over 40 percent market share. Gala, Superbite, Beefie, and Kingsway dominate the mixed sausage roll segment.
“These products now sit within the UAC umbrella,” Aiyesimoju said.
The numbers behind the deal
Aiyesimoju disclosed that CHI generated N428 billion in revenue last year and N54 billion in EBITDA. While UAC avoids giving forward guidance, he said revenue for 2025 will be “significantly higher.”
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Improving EBITDA, he stressed, is the company’s top priority: “Improving that N54 billion, meaningfully improving it, is our number one, number two, number three, number four and number five priority.”
With the acquisition completed, UACN now controls one of the largest beverage and snack portfolios in Nigeria, and Aiyesimoju insists the timing, fit, and financial logic could not have been stronger.
“We knew we had to strike,” he said. “And we believe this decision positions UAC for the next phase of its growth story.”
Since the details of the transaction were made public, UACN has appreciated by 16.7 percent. Moving from N60 per share on November 17 to close at N70 per share on November 21.
David Olujinmi
David Olujinmi is a financial journalist, with a knack for reporting and analysing the capital markets. He has experience in reporting the Nigerian and African financial scene.
With a Bsc in Chemical Engineering from the Obafemi Awolowo University, he has a significant grasp of numbers that has aided his understanding of the financial context.
