A worker lifts a bag of flour at the Dangote flour mill in Apapa district in Nigeria's commercial capital of Lagos.

Johannesburg - Tiger Brands, South Africa’s largest food company, will write off about half of its investment in Dangote Flour Mills less than two years after buying a majority stake in the Nigeria-based producer.

Tiger, which makes Jungle Oats and All Gold tomato sauce, will impair Dangote Flour’s value by 849 million rand because of “underperformance” and “excess milling capacity that continues to increase in the Nigerian flour market,” the Johannesburg-based company said today.

Tiger bought a 63.5 percent stake Dangote Flour Mills from Dangote Industries in September 2012 for about $190 million (R2 billion), its third purchase in Nigeria.

The company targeted acquisitions in Africa’s largest economy as it saw limited opportunities in its home market.

Tiger sees earnings per share for the six months ended March 31 falling as much as 55 percent from a year earlier because of the write-off, it said in a statement.

Excluding the impairment, profit from continuing operations will improve 6 percent to 10 percent, Tiger said.

Tiger erased losses of as much as 2.8 percent, gaining 2.4 percent to 283.32 rand by 11:09 a.m. in Johannesburg. - Bloomberg News