Livestock Feeds: Sunbeth Takeover Clears Major Hurdle As NGX Approves UAC N19.5bn Divestment

UAC of Nigeria has handed its long-standing majority shareholding a clean exit route this week: the Nigerian Exchange approved UAC's N19.5 billion divestment of its 73.29 percent Livestock Feeds stake to Sunbeth Treenuts and Sesame, clearing the last regulatory hurdle in a sale that transfers one of Nigeria's oldest animal-feed manufacturers to an indigenous agribusiness group after more than six decades of foreign and conglomerate ownership.

The path to a restructured agrifood sector has been under negotiation since the end of September, when UAC of Nigeria announced an agreement to sell its 73.29 percent controlling stake in Livestock Feeds — the animal-feed manufacturer founded in 1963 by chemicals pioneer Pfizer, listed on the Nigerian stock exchange in 1978 and controlled by UAC since 2013 — to Sunbeth, a Nigerian agribusiness group that trades cash crops in Ghana, Nigeria and elsewhere across West Africa. The deal values UAC's stake at approximately N19.5 billion in cash, equivalent to N8.85 per Livestock Feeds share, a widely followed deal table that discounts the stock's market price by a third.

The anatomy of a decades-long agro turnaround

The divestment ends a 13-year UAC stewardship that transformed the manufacturer from a loss-making heritage business into a distribution-backed platform. Under UAC's ownership, the company built production capacity across Ikeja, Aba and Kano — a national footprint serving poultry, aquaculture and livestock farmers — and the group's most recent financial disclosures, filed in November, describe the feed business as an industrial unit inside UAC's broader food and chemicals portfolio, supporting the poultry-heavy demand of Nigeria's most vulnerable urban food supply chains.

UAC itself has been running a parallel portfolio consolidation. Announced in late September, days after the feed deal, the group agreed to sell its stake in DP World Logistics, leaving UAC with a concentrated food-and-housing-products footprint across packaged foods, paints, quick-service restaurants, cereals and real estate. Group managing director Fola Aiyesimoju has described the feed business under UAC's watch as having grown revenues fivefold with profitability increasing 18 times — and the exit as another step in reshaping the portfolio, with the sale proceeds redeployed across the remaining businesses and continued deleveraging, as the group's own Q3 filing puts it.

The price at which the transaction will be evaluated highlights the awkward centre of Nigerian stake-sale deals in general. UAC will receive N8.85 per share for its 73.29 percent stake — a figure well below the market quotations the equity now commands, so advisers to both parties constructed a compromise valuation that transfers UAC's controlling block at a clean price while leaving minorities free to trade in the open market.

Sunbeth's accession — and its new responsibilities

The buyer brings a neatly matched profile. Sunbeth is one of Nigeria's fastest-growing agricultural commodity traders, with operations in nuts and sesame, and its ambition, as it frames it, is to build businesses that pair African origin with processing closer to the markets they serve. Animal feed is a logical next rung: Nigeria's poultry industry is the country's biggest single consumer of maize and soybeans, and the feed manufacturer's role between the farm and the grain trader is exactly the kind of value-chain control modern agricultural businesses are racing to assemble.

The transaction also marks a milestone in a pattern that Nigerian capital markets have watched build for a decade: the handover of a listed company to a domestic mid-market sponsor. Nigeria's producers have, in recent years, seen this dynamic in consumer goods and industrials — conglomerate exit, domestic operator takes over — and the record of these handovers is mixed, with regulators and the Nigerian Exchange keeping a close eye on minority shareholders, whose interests will now be represented by an owner with a much smaller balance sheet than UAC's.

Minority shareholders and the price gap

The equity market's verdict is the best signal of how the deal is being received by the people outside the agreement's direct parties. Livestock Feeds has traded between N13.65 and N14.60 per share in early November — well above the N8.85 negotiated price — on a 2.999 billion-share float that spans a 52-week range from N5.65 to N20.45, a profile that betrays the speculative energy the deal's announcement injected into the stock. Speculative rallies of that magnitude are the double edge of small-cap Nigerian equities: expectations are priced into a wide range of future outcomes, and the consolidation that comes next will test whether the market's aggressive bid for a Sunbeth mix was rational or aspirational.

The equity's overhang — a minority stake that remains outside UAC's divestment and outside Sunbeth's control — will keep the stock in the news as both parties work out whether the emerging owner extends its holding or the listed entity stays as a pure two-owner-dominated equity. For UAC's other listed entities, and for the wider bloc of Nigerian conglomerates considering portfolio exits, the clearance is a reminder that transactions of this magnitude can be executed end-to-end in a year when both the Exchange and the Securities and Exchange Commission have been under pressure to demonstrate that Nigeria's capital markets work.

To cap it, a footnote on Nigeria's agricultural-industrial future: the transaction, announced in the month when the central bank's inflation outlook has been slowing and the livestock industry warns of near collapse — is a vote of confidence in the sector's commercial potential precisely when its social challenges are at their peak. The poultry industry's feed bill is the economy's protein security question, and the buyer's campaign to expand industrial-scale feed production through Sunbeth's ownership is exactly the kind of equity solution that has historically arrived, in Nigeria, from government rather than capital markets. This one, UAC's exit, is from capital markets.