A Fresh Positioning Journey for FBN Holdings

Raheem Akingbolu, who has been following conversations around the Honeywell Group’s acquisition of additional shares in FBN Holdings Plc, writes that the development would further strengthen the quality of both brands, considering their legendary and competitive edges

The media space was greeted with enthusiasm recently, following the trending news about Honeywell Group purchase of over 4.7 billion additional shares from FBN Holdings. Of course, many investment analysts have since described the move as the largest single transaction in 2023.

To brand analysts, the development has simply confirmed the popular saying that ‘value attracts value. The reason is simple; Honeywell Group is a market leader, while FBN Holdings is not only an investment haven but the warehouse of the nation’s number 1 bank brand. The implication is that each of the brands will leverage on the common success story to break new records. Though this is not a partnership deal but all the same, it will be a mutually beneficial relationship. Experience over the years have shown that relationship between two brands allows established brands to reach new markets, gain greater distribution and dovetail on their partner’s previously established momentum.

According to reports, Honeywell made the strategic investment move through its affiliate company, Barbican Capital Limited. The investment company acquired 4.770 billion additional shares, leading to a staggering 14.8 per cent stake in FBN Holdings. Stock market dealers confirmed that over 4 billion ordinary shares ranging between N17 and N20 were purchased over the course of two days, July 6 and July 7, 2023.

Better outlook

On the global stage, one of the most exciting co-branding campaigns that are often cited is that of Coca Cola and Berkshire Hathaway. The relationship between the two brands has opened new vista for them both. According to their records, the relationship has contributed in no small measure to the growth of both brands globally.

Though the story of FBN Holdings Group and Honeywell Group Limited (HGL)is slightly different, the origin, age, experience and the trust consumers have in both brands called for the positive reaction that greeted the acquisition.

Samuel Ajayi, a former Editor of BrandPower, a wholly marketing communication journal, while commenting on the development said the relationship would be a win-win situation for stakeholders of both brands because they both parade a robust profile of credibility.

“I understand there are apprehensions in a few quarters, obviously from interested parties, but I’m happy that on a larger scale, Nigerians, especially experts, saw the acquisition as a positive development because of where the two brands are coming from. For instance, FBN Holdings Plc is a well-diversified and one of the largest financial services organisations in Africa. It is structured along Commercial Banking, Merchant Banking, Capital Markets, Trusteeship, and Insurance brokerage.

“On the other hand, 50-year-old HGL is a leading investment holding company with a deep history of building, scaling, and investing in some of Nigeria’s most successful businesses. For over five decades, the company has invested in critical sectors of the economy and has built a solid track record of successfully enabling the growth of thriving, world-class companies in their respective sectors. No doubts, the resilience and the success story of the two brands are enough to further shore up the profile of the new FBN Holdings,” Ajayi said.

Higher level of competition

If the contents of a letter from the Managing Director of the Honeywell Group, Mr. Obafemi Otudeko, addressed to the Chairman, FBN Holdings Plc, on the acquisition is anything to go by, then it’s obvious the business relationship meets the dictates of mutual agency. Otudeko’s letter had indicated the advantage Honeywell Group was bringing to make the holdco more successful over time, while clearly stating its blueprint and business interests in other sectors of the economy.

In a statement from the company, it mentioned that it had, “notified FBN Holdings Plc (FBN) and regulatory authorities of the acquisition of 4,770,269,843 shares of FBN by its affiliate company, Barbican Capital Limited. This purchase is in addition to previously disclosed interests by HGL’s affiliates.”

It’s obvious that a rancor-free legally binding relationship entered into by FBN Holdings and HGL will impact positively on the brands. To start with, two major opportunities are already around the corner for the new FBN to grab.

With the new status of FBN Holdings, experts believe that in a matter of time, its market share will increase, which will allow the group to achieve greater scale with its operations and improve profitability. Besides, many experts have submitted that the larger the company, in theory, the more competitive it becomes. Going by this submission, FBN Holding stands very well to boost its economies of scale because being bigger will allow it to compete for more.

To this end, it’s obvious that FBN appears prepared to deepen operation and consolidate its market leadership, which has been sustained over the years. And for the Honeywell, this is also an association that would further position it for increased opportunities.