Stock price of Lafarge Africa appreciates by 10% on Huaxin Cement takeover
The stock price of Lafarge Africa Plc on Monday gained 10 per cent to close at per share on the Nigerian Exchange Limited (NGX) following the cement manufacturing takeover by Huaxin Cement next year.
Lafarge Africa on the Exchange closed trading at N63.8 per share, after gaining 10 per cent or N5.8 per share from N58 per share the stock opened for trading.
Recalled that Holcim Limited, an international investor holding its shares in the names of its subsidiaries, Associated International Cement Limited (AIC) UK and CariCement BV is seeking regulatory approval to handover 83.81 per cent of its stake in Lafarge Africa Plc to Huaxin Cement by 2025.
According to a report, the transaction is worth an equity value of $1 billion.
From its audited result and accounts, Holcim Limited as of December 2023 had a shares in the names of its subsidiaries: AIC Limited UK(27.77per cent) and CariCement BV (56.04per cent) in Lafarge Africa.
The remaining 16.19per cent of the issued shares were held by other individuals and institutions.
The Company Secretary, Lafarge Africa, Adewunmi Alode in a sign statement on the Nigerian Exchange Limited (NGX), yesterday stated that the Board at a meeting considered communications received from Lafarge’s largest shareholders, Caricement B.V and AIC Limited.
According to him, “Caricement’s sole shareholder, Holderfin B.V, part of the Holcim Group, has reached an agreement with Hainan Huaxin Pan-Africa Investment Co. Limited and Huaxin (Hong Kong) International Holdings Limited, part of Huaxin Cement, pursuant to which they will acquire respectively full ownership of Caricement and a second entity, Davis Peak Holdings Limited, which will hold the shares held currently by AICL.
“Upon completion, the Huaxin Cement entities will hold a combined 83.81per cent shareholding in Lafarge Africa.
“This transaction is subject to regulatory approvals and is expected to close in 2025. Following completion of this transaction, Lafarge Africa Plc will remain listed on NGX and, subject to regulatory approvals, Huaxin Cement intends to launch a mandatory takeover offer incompliance with applicable laws and regulation.”
In November 2023, Holcim said it had signed deals to sell its businesses in Uganda and Tanzania, saying they “advance our strategy to consolidate our leadership in core markets as the global leader in innovative and sustainable building solutions”.
The deal is the latest in a series of African acquisitions by Huaxin Cement.
In 2021 it said it had agreed to buy two businesses that were part of Lafarge, which merged with Holcim in 2015: a 75per cent stake in Lafarge Zambia and all of Lafarge Cement Malawi. It also announced last year that it was buying South Africa’s Natal Portland Cement Company.
Holcim has focused on sustainable growth in its core markets, higher-margin products and strategic infrastructure investments. It is also seeking to improve its environmental credentials and in September took a stake in Sublime Systems, a U.S. tech start-up working on low-carbon cement.
Lafarge Africa in its unaudited nine months ended September 30, 2024 announced about N60.08 billion in profit after tax, about 53 per cent increase from N39.31billion reported in nine months of 2023.
The nine months of 2024 results reflected strategic focus on sustainability and operational efficiency as profit before tax closed at N94.33billion, representing an increase of 54 per cent from N61.16 billion reported in nine months of 2023.
The cement maker declared N479.5billion net sales in nine months of 2024, up by 66 per cent from N289.08billion in nine months of 2023, a major contributing factor that impacted on profit generation.
