(Adds Rencap analyst comment)
By Oludare Mayowa and Chijioke Ohuocha
LAGOS, July 9 Shareholders in Lafarge Wapco
, the Nigerian unit of French cement maker Lafarge
, on Wednesday approved a $1.35 billion deal combining
its Nigerian businesses with Lafarge's wholly-owned South
Olusegun Osunkeye, chairman of Lafarge Wapco told
shareholders at a meeting the Nigerian cement firm would pay the
Lafarge group $200 million in cash and 1.4 billion in new shares
to buy Lafarge's South African unit and other of its Nigerian
businesses in order to combine them.
After the merger, the new combined entity 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.
Lafarge Wapco also won shareholder approval to raise 100
billion naira in debt or equity on domestic or international
Analysts at Renaissance Capital maintained its buy
recommendation on Lafarge Wapco but said the deal could dilute
existing shareholders and maintained its target price of 130
naira per share on the stock. Lafarge Wapco traded at 112.07
naira on Wednesday, up 1.71 percent.
"We believe that ... there are attractive assets in the mix,
pricing is a real issue and some of the assets involved would
dilute shareholder value," Renaissance Capital said in a note.
"We favour the acquisitions of Unicem and Ashaka Cement, but
take a negative view on the inclusion of Atlas Cement and
Lafarge South Africa at the indicated price."
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 consolidation will enable Lafarge to accelerate growth
on the African continent and expand its product offering in
South Africa and across the region, the cement maker has said as
a reason for the merging both businesses.
Lafarge faces intense competition in Africa, especially from
arch rival Dangote Cement, owned by Africa's
richest man, Aliko Dangote. The company, Nigeria's biggest with
a market capitalisation of around $24 billion, is set to roll
out cement plants across Africa.
The deal is expected to close in the second half of the
year. It now needs regulatory approval.
Also shareholders on Wednesday approved an increase in
dividend payment to 3.30 naira per share for the 2013 financial
year, up from 1.20 naira paid in 2012.
(Writing by Chijioke Ohuocha; Editing by David Evans)