Lafarge Group has announced its intention to transfer all of its shares in its businesses in Nigeria and South Africa into Lafarge Cement WAPCO Nigeria plc to create a mega continental group and a leading sub-Saharan African building materials platform.
Chief Olusegun Osunkeye, Chairman, Lafarge WAPCO, announced this in Lagos Tuesday after the new company was on the Nigerian Stock Exchange.
He said the company is combining its Nigeria and South Africa businesses with a combined cement capacity around 12mtpa, as well as operations in aggregates, ready mix concrete and fly ash.
When finalised, he disclosed, Lafarge Cement WAPCO Nigeria plc will be renamed Lafarge Africa plc.
“I am proud to be part of the creation of this leading African building materials platform. The fusion will provide access to growth in two of the largest economies on the continent,” Osunkeye told P.M.NEWS.
He stated that Lafarge Africa, owned 73 per cent by Lafarge Group, will remain listed on the NSE, and it will be strongly positioned to benefit from growth and development opportunities in two countries.
Their combined businesses annual sales in 2013 totaled US$1.25bn and EBITDA of US$345mn.
Under the proposed terms, Lafarge Group will transfer its direct and indirect shareholdings in Lafarge South Africa Holdings (Pty) Limited (100.00 per cent-representing 72.4 per cent of underlying companies in South Africa), United Cement Company of Nigeria Limited (35.00per cent), Ashaka Cement Plc (58.61per cent) and Atlas Cement Company Limited (100.00per cent) to Lafarge WAPCO.
Guillaume Roux, Executive Vice President, Operations and Country CEO Nigeria, Lafarge Group, added that the announcement marked a key milestone as it adds momentum to the group’s push for differentiation in order to deliver innovation that will increase and improve the company’s product portfolio.
Roux said the deal, worth $1.35 billion, will see the Lafarge group get $200 million in cash consideration and the issuance of 1,402,575,984 Lafarge Africa new shares to Lafarge Wapco to effect the merger.
The Country CEO said he expected the deal, which is still subject to shareholders’ and regulatory approvals, to close in the second half of the year.
“Our objective is to bring more housing and contribute to building better cities that are more beautiful, more compact, more connected and more durable,” he said.
The combined company would seek to boost cement capacity by 5.5 million tonnes to 17.5 million tonnes after the merger.