(Apr 24): Olam International made a cash bid to buy Dangote Flour Mills Plc of Nigeria as the Singapore-based agriculture trader looks to expand in West Africa as part of a rejig of its portfolio.

Olam will offer 130 billion naira ($490 million) for Lagos-based DFM, which is part of the business empire of Aliko Dangote, Africa’s richest man. The price was calculated on a debt-free basis, and will be adjusted to account for net borrowings, the Nigerian company said in a statement on Tuesday.

The move sees Olam going back to its roots. The company was founded in Nigeria as an exporter of cashew nuts 30 years ago, and has since grown into a global behemoth with operations in more than 60 countries and a market value of $4.5 billion. The deal will enable it to build on a country workforce of almost 3,000, while tapping local demand for bakery, snacks and pasta products.

“We are confident about the growth prospects in this country and this acquisition, doubling our installed capacity here, is evidence of our long-term commitment to the Nigerian economy,” KC Suresh, head of Olam’s grains and animal feed division, said in an emailed statement.

The acquisition is also part of a strategic shift toward areas that offer the most demand, including flour milling in West Africa. Nuts, cotton and tropical spices have also been earmarked for expansion, Olam said in January, while the company will exit commodities such as sugar and rubber.

For Aliko Dangote’s part, an agreed deal would represent a significant turnaround after the billionaire bought a majority stake from South Africa’s Tiger Brands for a nominal US$1 in late 2015. The businessman’s holding company, Dangote Industries, also agreed to invest 10 billion naira in DFM as part of that deal. Aliko has a net worth of US$16.5 billion, according to the Bloomberg Billionaire’s Index.

DFM’s shares jumped 9.8% to 11.75 naira after the offer was announced, valuing the firm at 58.75 billion naira. The company’s board will consider the proposal, it said in the statement.

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