French cement maker Lafarge will combine its South Africa business with publicly traded Nigerian unit Lafarge Wapco, listing its Africa interests together on the Lagos bourse, the company said in a statement yesterday.
The new company will be known as Lafarge Africa and will have a market capitalisation of more than $3-billion. Lafarge group will own 73% of the combined entity. It will be the sixth highest capitalised company on the Nigerian bourse, the company said in a statement.
The combined company will have nationwide coverage in both Nigeria and South Africa, and will have capacity to produce around 12-million tons of cement. It will also have operations in aggregates, ready-mix and fly ash.
“It will provide access to growth in two of the largest economies on the continent,” Olusegun Osunkeye, chairman of Lafarge’s Nigerian unit WAPCO, said in the statement. “It will mean that our shareholders are invested in a larger and more geographically diverse business.”
Roux said at a press conference that cement industry demand was projected to grow by around 14% over the next five years in Nigeria, while growth in South Africa was expected to be around 4%, Reuters reported.
The transaction will include a $200-million cash payment to Lafarge and the issue of 1.4-billion new shares.
The deal is still subject to shareholders’ and regulatory approvals. It is expected to close in the second half of the year.