VENTURES AFRICA – World’s largest yoghurt maker, Danone has partnered with Dubai private equity firm Abraaj Group to buy Fan Milk International (FMI), a frozen dairy products and juices maker in West Africa with sales of around $26.3 million in 2012.
Established as a family business over 50 years ago, FMI is a market leader in frozen dairy products in West Africa with operations in Ghana, Nigeria, Togo, Ivory Coast, Benin and Burkina Faso.
In June this year, Abraaj Group announced the acquisition of a 100 percent stake in Fan Milk through one of its funds. However, the new deal with Danone will see it acquire only 51 percent stake while the dairy maker will get the remaining 49 percent.
In the coming years, Danone will gradually acquire controlling stake in the business. The transaction is expected to be finalised by the end of 2013.
According to a statement release by the company: “The combination of Danone’s know-how 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.”
Abraaj founder and group Chief Executive, Arif Naqvi says: “The acquisition of Fan Milk represents the largest FMCG private equity transaction in sub Saharan Africa, outside South Africa.
Naqvi said Abraaj “look(s) 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.”
According to Danone co-chief operating officer, Emmanuel Faber the transaction represents a major step in the company’s expansion in Africa.
Danone is expanding its business footprint on the continent after it encountered problems in Europe and China.
Last year, the company paid $760 million to take control of Morocco’s top dairy group, Centrale Laitiere.
With the new partnership, Faber said Danone will “now be able to develop the dairy product market in West Africa.”