Tiger Brands has not been put off buying businesses of scale and its rest-of-Africa strategy has been unaffected by its bad experience in Nigeria, CEO Peter Matlare says. Tiger’s acquisition of Dangote Flour Mills (DFM) in Nigeria two years ago for a “full price” has proved a major drag on the group’s earnings, with impairments and losses from Nigeria featuring prominently in Tiger’s results since. Of its initial R1.5bn investment for a majority stake in DFM, which was made to build scale in the country and serve as a platform for other opportunities, Tiger has had to write off the entire R849m premium paid for the business as well as a further R105m against the value of DFM’s assets. Victor Seanie comments.
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