UAC Nigeria Plc has deposited N19.2 billion as part of its share purchase agreement for the acquisition of CHI Limited. The transaction marks the most significant corporate transaction in Nigeria’s fast-moving consumer goods space this year.
According to the group’s third-quarter 2025 financial statement, the amount represents a portion of the total purchase consideration for the acquisition. However, the full transaction value remains undisclosed.
To fund the transaction, UAC Nigeria disposed of all its Eurobond investments during the review period. As of June 30, 2025, the group held Federal Government of Nigeria (FGN) Eurobonds, Ecobank Transnational Incorporated (ETI) Eurobonds, and Ecobank Nigeria Eurobonds worth a combined N5.58 billion. These were sold for N5.5 billion to generate liquidity for the CHI acquisition.
While the company reported a net operating cash flow of N18.1 billion as of the first nine months of 2025, it is unclear if part of its N43.2 billion new borrowings was directed toward the CHI deposit. The transaction, therefore, appears to be financed through a combination of asset disposals, internal cash generation, and debt.
On July 29, 2025, UAC Nigeria announced that it had reached an agreement to acquire CHI Limited, the manufacturer of popular beverage and dairy brands such as Hollandia and Chivita, from The Coca-Cola Company.
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Coca-Cola initially acquired a 40 percent stake in CHI in 2016 before completing a full takeover in 2019. According to BusinessDay findings, the U.S. beverage giant spent approximately $694.5 million, equivalent to between N160 billion and N170 billion at the time, to acquire CHI.
However, just six years later, Coca-Cola exited the Nigerian business, taking a $393 million haircut on its investment. The divestment underscores the company’s growing caution toward the volatile Nigerian market, where the naira has lost nearly 80 percent of its value between 2019 and 2025.
Coca-Cola’s retreat highlights a broader trend of multinational companies reassessing their exposure to Nigeria’s difficult operating environment. Since 2020, the environment has been characterised by currency instability, inflationary pressures, and rising production costs. For UAC, however, the acquisition represents a renewed bet on local manufacturing and brand heritage.
UAC Nigeria reported a net loss of N1.98 billion in the third quarter of 2025, its first quarterly loss in two years. This brings its nine-month net profit to N5.38 billion, a 61 percent decline from N13.7 billion in the same period of 2024.
Still, the company’s performance reflects more than headline profitability. Operating profit grew by 9.1 percent year-on-year to N13.4 billion, up from N12.3 billion in 9M 2024. The group, however, faced a sluggish third quarter, with revenue dipping 1.5 percent year-on-year to N49.2 billion, compared to N49.9 billion in Q3 2024.
When adjusted for a one-off foreign exchange gain of N10.2 billion recorded in 9M 2024, UAC’s normalized net income showed a strong rebound, rising by 66 percent year-on-year. This underlying improvement was also visible in cash flow performance: net operating cash flow surged 69 percent to N21.6 billion, up from N12.8 billion a year earlier.
For UAC, the CHI acquisition signals a strategic pivot toward stronger brand consolidation, as it enters the dairy and ready-to-drink market. The company’s decision to deploy substantial capital, even amid a volatile balance sheet left behind by Coca Cola, suggests confidence in their understanding of Nigeria’s consumption pattern.
While details of the final purchase price remain unknown, the integration of CHI could significantly reshape UAC’s earnings profile in the coming years, creating one of the largest local consumer goods portfolios in West Africa.