Explaining the Dangote Sugar, Dangote Rice, and NASCON Merger for All Shareholders

An in-depth analysis of the Dangote Sugar, Dangote Rice, and NASCON merger and its implications for all shareholders.

Explaining the Dangote Sugar, Dangote Rice, and NASCON Merger for All Shareholders
The Dangote Group recently revealed a merger involving its subsidiaries: Dangote Sugar, NASCON, and Dangote Rice.

This will proceed via a scheme of consideration detailed in a press release signed by Company Secretary, Mrs. Temitope Hassan.

Conditions of the Merger

According to the release, the conditions for the merger completion are as follows:

For every 12 NASCON shares of 50 Kobo each, 11 fully paid-up Dangote Sugar Refinery (DSR) shares will be issued, totaling 2,428,651,847 new DSR shares.

In exchange for each 1 Dangote Rice Limited (DRL) share of N1.00 Kobo, 14 fully paid-up DSR shares of 50 Kobo each will be issued, resulting in 2,775,792,508 new DSR shares.

Implications for Shareholders

So, what does this mean for shareholders? Let’s break it down with a simple mathematical formula used by investors for calculations:

DSR Shares (11) = A

NASCON (12) = B

What you own (example 100) = C

The formula is C/B multiplied by A.

For NASCON Shareholders

NASCON shareholders will receive 11 ordinary shares of Dangote Sugar Refinery for every 12 they have in NASCON.

For example:

If you have 100 shares of NASCON, you will receive approximately 92 shares in Dangote Sugar Refinery, making you a shareholder of DSR.

If you have 200 shares in NASCON, you will receive approximately 183 shares in DSR.

If you had a random number like 443, you would receive 406 units in DSR.

NASCON will dissolve, with all shareholders becoming DSR stakeholders.

For Dangote Rice Limited (DRL) Shareholders

DRL shareholders will receive 14 ordinary shares in DSR for every 1 they own in DRL. For example:

If you have 100 shares of DRL, you will receive approximately 1,400 shares in Dangote Sugar Refinery (DSR), making you a shareholder of DSR.

If you have 250 shares in DRL, you will receive approximately 3,500 shares in DSR.

With a random number like 670, you would receive 9,380 units in DSR.

DRL will end, with all shareholders transitioning to DSR stakeholders.

For Dangote Sugar Refinery Shareholders

According to the press release, the shareholders of DSR will be diluted by 2,428,651,847 new ordinary shares for NASCON and 2,775,792,508 new ordinary shares for DRL, totaling 5,204,444,355 shares of Dangote Sugar Refinery shares.

This boosts Dangote Sugar Refinery’s existing 12,146,878,241 shares by 42.8%, adding 5,204,444,355 shares.

Despite the dilution, the company’s market value should rise.

Why This Merger Matters:

It streamlines Dangote Group’s subsidiaries, heightening efficiency and competitiveness.

This leads to greater revenues, dividends, and resilience to economic shifts.

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