Lafarge is consolidating its African operations by combining its businesses in Nigeria and South Africa. Lafarge will transfer its shares in its Nigerian and South African operations into Lafarge WAPCO Nigeria Plc, which will then be renamed Lafarge Africa Plc.
The business will have a cement production capacity of around 12 million tpa, in addition to operations in the aggregates, ready-mix and flyash markets. Lafarge Africa will enable the Group to strengthen its presence in the developing Nigerian and South African markets, and allow it to meet demand for building materials and services in Sub-Saharan Africa.
In 2013, the combined sales of the two companies to be consolidated reached US$1.25 billion and EBITDA totalled US$345 million. The new entity, in which the Lafarge Group will hold a 73% stake, will continue to be listed on the Nigerian Stock Exchange (NSE). Lafarge Africa will be the sixth largest company on the NSE in terms of market capitalisation.
The Lafarge Group will transfer its direct and indirect shareholdings in Lafarge South Africa Holdings (Pty) Limited (100% – representing 72.4% of underlying companies in South Africa), United Cement Company of Nigeria Limited (35%), Ashakacem Plc (58.61%) and Atlas Cement Company Limited (100%) to Lafarge WAPCO. The transaction will be concluded through a cash consideration of US$200 million and the issuance of 1 402 575 984 Lafarge Africa shares to the Lafarge Group.
The transaction, which is subject to regulatory authorisation and Lafarge WAPCO shareholder approval, is expected to close in 2H14.
“I am proud to be part of the creation of this leading African building materials platform. It will provide access to growth in two of the largest economies on the continent. It will mean that our shareholders are invested in a larger and more geographically diverse business; and it will contribute significantly to the economic growth of both our nations,” said Chairman of Lafarge WAPCO, Chief Olusegun Osunkeye, OFR, OON.
“Today's announcement marks a key milestone. It adds momentum to our push for differentiation in order to deliver innovation that increases and improves our product portfolio. Our objective is to bring more housing and ever better solutions to contribute to building better cities that are more beautiful, more compact, more connected and more durable,” added Guillaume Roux, Lafarge Group EVP Operations/Country CEO Nigeria.
According to local press, Lafarge plans to invest in its Zimbabwe operations. Speaking at the launch of Superset cement, Lafarge Cement Zimbabwe’s CEO told press that studies were being carried out into a possible plant upgrade project. The investment, suggested to be around US$10 – US$15 million, would help to increase the plant’s capacity utilisation rate.
Edited from various sources by Louise Fordham
Read the article online at: https://www.worldcement.com/africa-middle-east/04062014/lafarge_group_announces_creation_of_lafarge_africa_296/