Africa’s richest man, Aliko Dangote, on Monday, announced his resignation from Dangote Flour Mills following South Africa’s Tiger Brands funding withdrawal.
Dangote resigned alongside Olakunle Alake, Asue Ighodalo and Arnold Ekpe immediately after the announcement, which may mean the end of DFM.
Tiger Brands, a South African consumer goods maker, revealed its decision to cease funding its Nigerian division as it undergoes major economic reviews.
“Tiger Brands has decided not to provide further financial support with respect to its investment in Tiger Branded Consumer Goods Plc of Nigeria,” the company said in a statement.
According to Reuters, Tiger Brands has not made money from Dangote Flour Mills (DFM) since paying nearly $200 million for a 65 percent stake in the firm back in 2012.
Though DFM is named after Dangote, his group’s equity stake in the firm is only 10 percent. Anthony Geard, an industry analyst with Investec Securities, said “without Tiger Brands injecting money, it is the end of the line for DFM”.
Tiger Brands, which makes bread, breakfast cereals and energy drinks, bought the business as part of a plan to expand elsewhere in Africa to offset slow growth at home.
“In the longer term, Nigeria will probably be a good place to be if you have scale but Tiger Brands would probably have to refinance Dangote and probably take it a step forward by, for example, going into baking,” Avior Capital Markets’ analyst Jiten Bechoo said.
Tiger Brands’ other businesses in Nigeria, Deli Foods and UAC Foods, will not be affected by the review.
