By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)-Shareholders of cement maker, Lafarge Cement Wapco Nigeria Plc has endorsed the $1.35 billion merger with Lafarge’s wholly-owned South African subsidiary, Lafarge SA.
Olusegun Osunkeye, chairman of Lafarge Wapco on Wednesday informed shareholders of the company at its annual general meeting (AGM) that the Nigerian unit would pay the Lafarge group $200 million in cash and 1.4 billion in new shares to buy Lafarge SA and other of its Nigerian businesses in order to combine them.
He said after the merger, the new company will be renamed Lafarge Africa Plc and listed on the Nigerian bourse with a market capitalisation of around $3 billion.
Lafarge group will own 73 percent of the combined entity and would become the sixth most capitalised company quoted on the floor of the Nigerian Stock exchange (NSE) with Dangote Cement Plc the highest most capitalized company with $24 billion.
In the same vein, Lafarge Wapco also got shareholders approval to raise 100 billion naira in debt or equity on domestic or international capital markets.
Lafarge owns 60 percent of Lafarge Wapco, its listed subsidiary in Nigeria, 58.6 percent of another Nigerian listed company Ashaka Cement Plc, and 100 percent of the Atlas cement company. It has joint ownership with Holcim of privately held United Cement Company of Nigeria. It owns 100 percent of the Lafarge South African business.
The cement maker said the merger will enable Lafarge to accelerate growth on the African continent and expand its product offering in South Africa and across the region.
The deal is expected to materialise during the third quarter (Q3) of 2014 as it needs the approval of Nigeria’s Securities and Exchange Commission (SEC). Once the deal is done, a mandatory tender offer will be open to minority shareholders of Ashaka Cement to give them the opportunity to swap their shares for Lafarge Africa’s shares.
The transaction will see Lafarge Group transfer its direct and indirect shareholdings in Lafarge South Africa Holding Limited of 72.4 percent and its equity stakes in three other cement companies in Nigeria-United Cement Company of Nigeria Limited, 35 percent; Ashaka Cement Plc, 58.61 percent and Atlas Cement Company Limited, 100 percent; 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.
Also, shareholders approved the 175 percent increment in dividend payout to N3.30 per share for the 2013 audited year end, up from N1.20 paid in 2012.
A review of the 2013 audited year end of the cement maker shows that profit after tax (PAT) climbed up 92 percent to N28.2 billion in 2013 from N14.7 billion recorded in 2012.
Similarly, profit before tax (PBT) grew by 30 percent to N27.7 billion in 2013 end from N21.3 billion recorded in the corresponding year of 2012.
Turnover increased by 12 percent to N98.8 billion in the review period from N87.9 billion in 2012 end.
