Afrisam has terminated a second attempt to merge with its larger rival, PPC, but will return with a better bid, local media has reported. The two companies had entered into a heads of terms (HoT) agreement, which had formed the basis of engagement talks.
PPC, which is South Africa’s largest cement maker, notified shareholders that the HoT had been terminated on 25 August, ahead of a shareholder meeting on 28 August.
“Notwithstanding the termination of the HoT, Afrisam has indicated to PPC that it intends submitting a new proposal regarding a possible combination of the parties,” PPC said in a statement.
“We cancelled the talks so we can do one big and better deal,” a source familiar with the talks told South African daily, Business Day. The new proposal would include an equity partner that would help to recapitalise the combined entity – providing the means to compete with the larger producers in Africa.
“It remains out believe that a transaction between the two companies offers the local cement industry an opportunity to develop a local cement champion with the required scale, operational efficiency and balance sheet to enable further investment opportunities in South Africa and the rest of the continent,” acting Afrisam CEO, Rob Wessels, said in a statement.
PPC Chairman, Peter Nelson, sounded a note of caution, however, saying his company couldn’t “carry on forever” with negotiations.
This is the second time a potential merger of the two companies has fallen through. Afrisam first attempted to combine the two entities in December 2014, before halting the effort in 2015.
Read the article online at: https://www.worldcement.com/africa-middle-east/29082017/afrisam-promises-third-bid-for-ppc/