Shareholders approve Dangote/BCC merger


The proposed merger between Dangote Cement and Benue Cement Company Plc, was given a boost yesterday as shareholders gave their blessing at a court-ordered meeting held in Kano. Chairman BCC Alhaji Aliko Dangote speaking at the meeting assured shareholders of immense benefits from the merger which include: reduced operational cost arising from improved efficiency and the remaining five years of tax holiday still being enjoyed by some of the component arms of the emergent company.


At the end of the poll, a total of 3.597 billion shares or 99.8 per cent of the total 3.604 billion ordinary shareholding of BCC voted in support of the merger. Fielding questions from shareholders at the meeting, Dangote said the merger will facilitate better access to financing, adding that the post-merger entity would have a bigger balance sheet and a larger collection of high quality assets that can potentially be pledged as collateral to lenders.


According to him: “The proposed merger is conceived with the goal of consolidating the cement producing entities of Dangote Industries Limited in Nigeria under a single entity presenting a robust platform for the enlarged DCP to optimize on available growth opportunities having regard to the present state of the Nigerian cement industry.


This is expected to significantly increase production capacity, boost turnover and profitability and eventually lead to an enhanced dividend payout and capital appreciation for the investors.”


“Our reason for listing any of our companies is to take care of shareholders. So far we have given dividend of over N23 billion this year,” he said.


Going by expected revenue growth arising from the merger, among others, the chairman projected that dividend level for the Dangote Group will go to between N50 and N60 billion soon.


Speaking also on the benefit of the merger, Managing Director of BCC, Shree Junnarkar explained that the merger will increase value creation by streamlining of the management, operations and processes of both companies, thereby leveraging positive economies of scale in purchasing and manufacturing, and unifying the companies, distribution and sales strategies. The directors of DCP and BCC are of the opinion that significant cost revenue synergies will   accrue from the merge to create additional value to the shareholders of both companies,” he said.


Junnarkar added that the enlarged entity will present value proposition for shareholders and existing BCC shareholders would especially benefit from expected significant immediate accretion in earnings and net assets per share post merger.


All the shareholders who spoke at the meeting commended the merger proposal, saying it would benefit them immensely and pledged their support for the exercise.


For instance, Dr, Faruk Umar, said it is an opportunity for the shareholders to own shares of a bigger firm with higher future prospects and hailed Dangote for the decision to share his fortunes with other investors.


Mrs. Augustine, also commended the merger, saying shareholders have been benefiting from BCC since the Dangote Group took over the company a few years back. She added that merging with DCP would lead to more dividends for them going forward.


Alhaji Mukhar Muktar, another shareholder gave his support for the merger and the Dangote Group, saying that the listing of companies in the Group on the NSE was the best thing that has ever happened in the Nigerian economy.


Meanwhile, Managing Director of Afrinvest (West Africa ) Limited, Mr. Ike Chioke, who is one of the financial advisers to the merger, said apart from the benefits to shareholders, the listing of the enlarged company would boost the market capitalization of the NSE. The enlarged entity is expected to add N2.1 trillion to the market capitalization of the NSE. Chioke therefore urged investors to take advantage of the current market price of BCC and buy into the enlarged DCP that would be listed at N135 per share. BCC shareholders will exchange two of the shares for one share of DCP.



Source: Proshare





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