UAC of Nigeria Plc, one of the nation’s foremost conglomerates, has taken a decisive step to consolidate its position in the fast-moving consumer goods sector, confirming a massive deposit towards the final acquisition of CHI Limited. The company disclosed that it had placed N19.2 billion into an escrow account, completing a critical financial step in its landmark purchase of the beverage and dairy giant from The Coca-Cola Company.
The move is a strategic triumph for the local firm, following the successful securing of regulatory approval from the Federal Competition and Consumer Protection Commission. With the deal now effectively complete, UACN controls a portfolio of top Nigerian brands such as Chivita fruit juices and Hollandia dairy products, integrating them into a diversified group that already includes popular items like Gala sausage rolls and Swan Water.
This transaction carries significant economic weight, highlighting both the ambitious confidence of a local industry leader and the immense operational challenges that have recently prompted a major multinational corporation to exit the market. For UACN, the purchase is a calculated, strategic gamble designed to leverage local expertise. It was financed through a mixture of internal resources, including the sale of Eurobond investments, and substantial external debt. This included raising N16.1 billion through commercial papers, which carried a notably steep interest rate of 25 per cent. These high borrowing costs reflect the current high-interest rate environment within which Nigerian businesses must operate.
The sale signals a major retreat by Coca-Cola, which had completed its full takeover of CHI Limited in 2019. The American beverage giant has now exited the business, recording a substantial $393 million charge essentially a significant write-down on its investment. Analysts suggest that this considerable loss underscores the severe foreign exchange volatility in Nigeria, where the local currency’s drastic decline has eroded the profitability of global firms that rely on repatriating earnings.
UACN’s management stressed that the move was years in the making, not an opportunistic deal, aiming to create one of the largest local consumer goods powerhouses in West Africa. While the purchase incurred immediate costs with UACN reporting N2.2 billion in acquisition-related expenses that contributed to a quarterly loss in its most recent financials the long-term strategy focuses on leveraging CHI’s market-leading position and local supply chain. The integration is expected to secure the jobs of over five thousand employees and ensure that key operational decisions are better aligned with local economic realities, marking a definitive shift in the Nigerian Fast-Moving Consumer Goods sector.
