UAC Confirms Full Financing for Chi Limited Acquisition

UAC of Nigeria Plc has officially confirmed that its landmark acquisition of CHI Limited, makers of the iconic Chivita and Hollandia beverage brands — is fully financed and expected to close within the next two to four months, pending final regulatory approvals.

Speaking on a recent investor call, Fola Aiyesimoju, UAC’s Group Managing Director and CEO, assured stakeholders that the acquisition has been strategically planned and is backed by a combination of internal resources and external financing.

“This was not an opportunistic deal,” Aiyesimoju stated. “We planned this years in advance. We’ve been building a strong foundation — across people, IT systems, and risk management — to support the management of a larger, more complex business. The Chi acquisition fits seamlessly into our long-term growth strategy.”

While UAC has declined to disclose the exact price tag of the transaction, the company insists that the deal reflects deliberate, long-term planning rather than a reactionary move. The company’s cash and bank balances stood at ₦46 billion as of its most recent financials, while free cash flow was reported at ₦8.7 billion — an indication that the company is leveraging debt financing to support the deal.

“We are still constrained in what we can disclose,” said Aiyesimoju, citing the private nature of CHI Limited and the ongoing regulatory review process.

The transaction marks a return to acquisitive growth for UAC, which began mapping out its expansion strategy in 2022, focusing on acquisitions within Nigerian sectors it understands well. According to Aiyesimoju, CHI Limited is a perfect match.

“We chose to focus on acquisitions within Nigeria and in sectors we’re already deeply familiar with. Chi fits that playbook perfectly.”

CHI Limited is one of Nigeria’s largest fast-moving consumer goods (FMCG) companies. Its product portfolio dominates major segments of the market — from fruit juices to dairy drinks and snacks. Brands like Chivita and Hollandia are household names, enjoying strong brand equity and widespread consumer trust.

The company was previously owned by The Coca-Cola Company, which began investing in CHI in 2016 by acquiring a 40% stake, later completing a full takeover in 2019. According to Coca-Cola’s 2020 earnings report, the global beverage giant spent $257 million in cash for the remaining 60%, taking its total outlay to around $500 million — equivalent to approximately ₦180 billion at the 2019 exchange rate of ₦360/$1. At today’s rates (₦1,500/$1), that figure would amount to ₦750 billion.

For comparison, UAC’s total balance sheet currently stands at ₦161.4 billion, while its market capitalization is approximately ₦288.4 billion, highlighting the sheer scale of this acquisition and the confidence the company has in its execution capabilities.

This divestment also reflects Coca-Cola’s evolving strategy in Africa. The beverage giant appears to be transitioning toward an asset-light model, choosing to offload manufacturing operations while focusing on brand ownership, marketing, and distribution partnerships.

By stepping away from the ownership of Chi’s manufacturing capabilities, Coca-Cola is likely prioritizing core brand development and reducing operational complexity in key African markets.

For UAC, the acquisition opens a broad range of growth opportunities. According to Aiyesimoju, synergies in distribution, supply chain integration, and market expansion are among the most promising outcomes of the deal.

“The brands in the Chi portfolio will complement our existing products and deepen our distribution capabilities. There’s a lot of work ahead, but we’re excited and ready.”

With its strong logistics and nationwide retail footprint, UAC plans to integrate Chi’s operations into its existing ecosystem, unlocking cost efficiencies and enhancing market penetration.

The announcement of the deal has already triggered a wave of investor optimism. Following the acquisition news, UAC’s share price surged by 60%, driving its market capitalization to over ₦288 billion.

The company’s stock is now up a staggering 497% year-to-date and has delivered an eye-popping 1,900% return over the past five years, making it one of the top-performing equities on the Nigerian Exchange (NGX).

Analysts attribute this performance to UAC’s focused strategic direction, improved financial discipline, and smart allocation of capital — traits that have now culminated in one of the most ambitious acquisitions in Nigeria’s consumer goods sector in recent years.

While the acquisition is not yet finalized, all eyes will be on the final stages of regulatory clearance, which Aiyesimoju says are progressing steadily. Once the deal closes, market watchers will be keenly observing how UAC integrates Chi’s operations, how it finances the post-merger environment, and what further innovations or product expansions might follow.

If successful, the acquisition could solidify UAC’s position as a dominant player in Nigeria’s consumer market, allowing it to capitalize on growing demand for non-alcoholic beverages and dairy alternatives in Africa’s most populous country.