Nigerian Oil Palm Giant Presco Acquires Ghanaian Rival GOPDC

- Presco will make an initial payment of US$64.9 million
- GOPDC generates significant revenue
- The deal is unlikely to result in job losses
Presco Plc., a major Nigerian palm oil company, has acquired a 100% stake in Ghana Oil Palm Development Company (GOPDC) for US$124.9 million.
The deal will see Presco make an initial payment of US$64.9 million with the remaining balance settled at a later date.
Why the Acquisition?
Presco sees several benefits in this move:
Currency Diversification: GOPDC generates significant revenue (41%) from exports, helping Presco lessen its reliance on the Nigerian currency.
Market Expansion: The acquisition boosts Presco’s market share and customer base.
Economies of Scale: Combining operations is expected to improve Presco’s efficiency and competitive edge.
Increased Plantation Size: Presco’s plantation area will grow by 19%, enhancing its production capacity.
Potential Stock Market Boost: The deal may raise Presco’s market value on the Nigerian Stock Exchange, facilitating easier access to capital.
About GOPDC
Established in 1975 by the Ghanaian government, GOPDC is a prominent player in Ghana’s oil palm industry.
The company operates two estates in Ghana’s Eastern Region with a total of 21,000 hectares of plantations, of which 13,000 are currently under development.
GOPDC has processing facilities for palm oil and kernel production, with an annual capacity of 35,000 tonnes.
The company employs around 30,000 workers during peak harvest season and manufactures palm oil products under the “King’s” brand.
Financial Performance
In 2023, GOPDC generated US$30.6 million in net revenue, with a gross profit of US$18.1 million and an operating profit of US$12.6 million.
The company boasts a strong operating margin of 41.2% (as of December 2023), with forecasts predicting revenue to reach US$80.95 million by 2028.
Impact on Employees
While the deal is unlikely to result in job losses, Presco might alter GOPDC’s management structure and future direction.