Lafarge Sells 58.6% Stake in AshakaCem to Lafarge Africa

Following the merger with its sister company in South Africa, Lafarge Group yesterday traded its 58.61 per cent shareholding in Ashaka Cement Plc to Lafarge Africa Plc.

The transaction gives effect to part of the resolutions that were passed by the shareholders of Lafarge Africa Plc at the company’s annual general meeting held in Lagos recently.

The deal also marks another critical step in the Lafarge Africa consolidation transaction. Further announcements are expected to be made when milestones in respect of other key elements of the shareholder resolutions are reached.

The company had on July 9, 2014, received overwhelming shareholders’ approval to consolidate its cement businesses in Nigeria with Lafarge South African operations to create a leading sub-Saharan building materials giant to be known as Lafarge Africa Plc.

Under the transaction, Lafarge Group will transfer its direct and

indirect shareholdings in Lafarge South Africa Holding Limited of 72.4 per cent and its equity stakes in three other cement companies in Nigeria-United Cement Company of Nigeria Limited 35 per cent, Ashaka Cement Plc, 58.61 per cent and Atlas Cement Company Limited 100 per cent to Lafarge Wapco for a cash consideration of $200 million and the issuance of some 1.4 billion Lafarge Africa shares to the Lafarge Group.

Lafarge Africa, which would retain Lafarge Wapco’s subsisting listing on the Nigerian Stock Exchange (NSE), is estimated to have an initial market capitalisation of over $3 billion (about N468 billion), making it the 6th largest company on the NSE by market capitalisation.

Some stakeholders in Nigeria capital market had hailed the emergence of Lafarge Africa Plc stressing that the merger would lead to better returns and benefits for the investors.

A report on across-survey of leading investment experts and advisors showed a strong support for the decision of Lafarge to consolidate its Nigerian and South African businesses under a single entity. They described the move as a synergistic strategic adjustment that could change the game plan in the Nigerian investment market, the cement industry and African mergers and acquisitions.

Group Head, Research, Lead Capital Plc, Sadiq Waziri, said the consolidation into Lafarge Africa will translate into greater efficiency through the scale of economies.

Thisday