Companies · UAC of Nigeria

UAC is finishing a logistics exit that started with one buyer and ended with a different one

UAC of Nigeria disclosed on Thursday, September 24, that it's selling its remaining 43 percent stake in DP World Logistics to 22 Plus Invest Limited, part of the Tropical General Investments Group. The price hasn't been disclosed.

The company UAC is selling out of has changed hands twice since UAC first brought in a partner.

MDS Logistics, standing for Manufacturers' Delivery Services, started life in 1965 as a department inside UAC's own merchandising division, providing warehousing to UAC's companies before the service was extended to outside clients. In 2013, UAC sold 49 percent of the business to Imperial Logistics, a South African freight group, keeping 51 percent for itself. That partnership held for six years.

In July 2019, UAC agreed to sell Imperial another 8 percent, for $2.4 million in cash plus a transfer of profitable contracts, based on a $40 million equity value for the company. That took Imperial to 57 percent and UAC down to 43, the same 43 percent UAC is selling this week. "The Transaction is an important milestone for UAC and consistent with our strategy of working closely with partners in empowering best-in-class management teams," Aiyesimoju said at the time. The deal completed in March 2020.

Two years later, the buyer itself changed hands. DP World, the Dubai ports and logistics operator, acquired 100 percent of Imperial Logistics for approximately $890 million, a deal implemented on March 14, 2022, that delisted Imperial from the Johannesburg Stock Exchange. Imperial's Nigerian logistics business, the same one UAC had partnered on since 2013, became part of DP World's portfolio, and the company took on the DP World Logistics name it carries today. UAC's 43 percent rode along through the change, a minority holder in a business its original partner no longer owned.

That's the stake UAC is finally selling. Group Managing Director Fola Aiyesimoju framed it as the product of a working relationship, not a cold transaction. "UAC has worked closely with DP World's management to support the significant growth and expansion of the Company over the years," he said. "We believe TGI, following completion of the proposed transaction, will be a strong long-term partner for DP World Logistics, its management and employees."

TGI isn't a stranger to the sector either. Farouk Gumel, the group's vice chairman, described the acquisition as a fit between two different kinds of expertise. "By combining DP World's global expertise with TGI Group's deep market knowledge and extensive distribution network, we are building resilient supply chains that will unlock growth, strengthen regional connectivity and support economic prosperity for generations to come," he said. TGI already runs a wide domestic portfolio, agriculture, FMCG manufacturing, chemical production, poultry, financial services, and a stake in a logistics company that already moves freight across Nigeria gives it a supply chain partner rather than a new business line built from scratch.

The transaction is subject to regulatory approval, with no completion date confirmed, and TGI's purchase price for the 43 percent has not been disclosed.

UAC didn't start divesting from this business this week. It started in 2019, sold to a partner that was itself bought out two years later, and is only now closing the position it's held, quietly, through two changes of majority owner. This week's sale is the last step of a six-year exit, not the first step of a new one.