UAC of Nigeria Plc (UACN) held a highly anticipated investor and analyst briefing on November 20, 2025, marking its first major public engagement since announcing the monumental N182.4 billion acquisition of C.H.I Limited (CHI) from Coca-Cola. The session, held in Lagos, attracted capital-market analysts, institutional investors, and industry stakeholders eager to understand both the financing structure of the deal and its long-term implications for one of Nigeria’s oldest conglomerates.
From the detailed presentations delivered by the Group Finance Director, Funke Ijaiya-Oladipo, and Group Managing Director, Fola Aiyesimoju, it became clear that UACN views the acquisition as a generational opportunity—one that positions the group to dominate the food and beverage landscape for decades.
How the Deal Was Financed: SPV Structure and Aggressive Bank Funding
Ijaiya-Oladipo provided the most granular explanation to date of how the company mobilized N182.4 billion for the takeover. To execute the transaction efficiently, UACN created a wholly owned Special Purpose Vehicle (SPV)—UAC Food and Beverage Company Limited—tasked with acquiring and financing CHI. By housing all debt obligations within the SPV, UACN ensured a clean transition and avoided disruptions to its existing operations.
The financing mix showed a deliberate tilt toward debt:
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N30.8 billion (17%) came from UACN’s internal cash reserves.
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N151.6 billion (83%) was secured from banks through a 12-month U.S. dollar bridge loan.
Because Coca-Cola required dollar settlement, UACN hedged the entire facility, absorbing higher initial costs but preventing foreign exchange volatility from affecting the transaction. The company also disclosed that it has secured a fully underwritten 7-year naira refinancing loan and is preparing to access its N150 billion SEC-approved bond programme as interest rates ease.
Why UACN Believes the Time Was Right
During his presentation, Aiyesimoju explained that for a business like CHI—which has changed hands only once in 45 years—the window for acquisition is exceptionally rare. The challenging macroeconomic environment, softened valuations, and a wave of multinational exits from Nigeria created an unusual buying moment.
“Many companies were leaving. Prices were cheap. We thought it was a great opportunity to pounce,” he said.
UACN’s comparatively strong balance sheet and strategic clarity gave it the capacity to move decisively where others could not.
Strategic Fit: Entering High-Growth Beverage and Dairy Markets
Before the acquisition, UACN had no presence in three fast-growing consumer segments:
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Drinking yoghurt
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Evaporated milk
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Fruit juice and nectars
With CHI’s leading brands—Chivita, Hollandia, Capri-Sun, and SuperBite—UACN instantly becomes a dominant player in the non-alcoholic beverage and dairy market. The deal also brings one of the largest aseptic beverage facilities in sub-Saharan Africa, an extensive distribution network, and 52 SKUs across multiple categories.
Value Creation Plan: From 6% Margin to 15%
Perhaps the most compelling revelation was UACN’s plan to significantly expand CHI’s profit margins. CHI currently operates at about 6% margin, while UAC Foods—UACN’s comparable business—expanded its own margin from 1% to 15% in under five years.
The GMD declared that the company’s immediate priority is to raise CHI’s margins to 15%. With CHI now a N500 billion revenue business, each margin point unlocks roughly N5 billion in additional profit. A 9-point improvement therefore represents a N45 billion profit opportunity.
Key Risks: FX Exposure and Excess Inventory
Management acknowledged two critical risks:
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Intense FX exposure due to reliance on imported raw materials such as milk powder and juice concentrates.
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Excessively high inventory levels, with CHI holding about 220 days of stock—far above industry norms.
However, they believe these issues are also avenues for value creation. Fixing inventory inefficiencies alone could free up substantial cash, while their experience managing FX-sensitive operations—especially in their paints subsidiary—provides confidence that they can navigate currency swings.
Transformational Impact on UACN’s Financials
Once consolidated, CHI radically transforms UACN’s scale and earnings profile. Pro-forma financials for the 12 months ending September 30, 2025, show:
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Revenue rising from N223 billion to N717 billion
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EBITDA increasing from N25 billion to N67 billion
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Packaged foods and beverages now making up 85% of total revenue
Aiyesimoju described the acquisition as one of the most significant strategic shifts in UACN’s 146-year history, noting that the company has “tripled its scale” and is now positioned to unlock N45–N50 billion in additional profit as efficiencies improve.
With the stock already up 117% year-to-date and investor expectations rising, UACN now faces the challenge of delivering on an ambitious transformation plan—one that could reshape Nigeria’s FMCG landscape for years to come.
