LAGOS: French cement maker Lafarge will combine its South Africa business with publicly traded Nigerian unit Lafarge Wapco, listing its Africa interests together on the Lagos bourse, its country chief executive officer said.
Guillaume Roux said the deal, worth $1.35bn, will see the Lafarge group get $200m in cash and 1.4 billion new shares in Lafarge Wapco to effect the merger.
The new company, Lafarge Africa Plc, will have a market capitalisation of more than $3bn and will be listed on the Nigerian Stock Exchange, Roux told a news conference. Lafarge group will own 73 percent of the combined entity.
The combined company would seek to boost capacity by 5.5 million tonnes to 17.5 million tonnes after the merger. “The consolidation will enable the enlarged entity to accelerate growth on the continent and expand its product offering in South Africa across the region,” Roux said.
He said Standard Chartered Bank acted as independent valuation adviser on the deal while Nigerian-based investment bank Chapel Hill Denham was financial adviser on the merger. Lafarge Africa will become the sixth highest capitalised company on the Nigerian bourse, Roux said. Lafarge faces intense competition in Africa, especially from arch rival Dangote Cement, owned by Africa’s richest man, Aliko Dangote. The company, Nigeria’s biggest with a market capitalisation of around $24bn, is set to roll out cement plants across Africa.
The combined entity accounted for $1.25bn in 2013 annual sales, and earnings before interest, tax, depreciation and amortisation (EBITDA) stood at $345m. Roux said cement industry demand was projected to grow by around 14 percent over the next five years in Nigeria while it will grow by around
4 percent in South Africa over the
same period. Reuters
