(Corrects paragraph 2 to make clear Lafarge group is being paid
by Lafarge Wapco, not the other way round, and is receiving new
shares, not issuing them)
* Merger to enable Lafarge to grow in Africa
* To cross sell products across the African continent
* $1.35 bln merger deal to close H2, subject to approvals
By Chijioke Ohuocha
LAGOS, June 3 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, its country chief
executive officer said on Tuesday.
Guillaume Roux said the deal, worth $1.35 billion, will see
the Lafarge group get $200 million in cash and 1.40 billion new
shares in Lafarge Wapco to effect the merger.
The new company Lafarge Africa Plc will have a market
capitalisation of over $3 billion listed on the Nigerian Stock
Exchange, Roux told a news conference. Lafarge group will own 73
percent of the combined entity.
The combined company would seek to boost capacity by 5.5
million tonnes to 17.5 million tonnes after the merger.
"The consolidation will enable the enlarged entity to
accelerate growth on the continent and expand its product
offering in South Africa across the region," Roux said.
He said Standard Chartered Bank and Nigerian-based
investment bank Chapel Hill Denham was advising it on the
merger. He said Lafarge Africa will become the sixth most
capitalised company on the Nigerian bourse.
Lafarge faces intense competition in Africa, especially from
its arch rival Dangote Cement, owned by Africa's richest man
Aliko Dangote. The firm, Nigeria's biggest with a market
capitalisation of around $24 billion, is set to roll out cement
plants across Africa.
The combined entity accounted for $1.25 billion in 2013
annual sales and earnings before interest, tax, depreciation and
amortisation(EBITDA) stood at $345 million.
Lafarge owns 60 percent in Lafarge Wapco, its
listed subsidiary in Nigeria, 58.6 percent in another Nigerian
listed firm Ashaka Cement Plc, and 100 percent
equity holding in Atlas cement company limited. It shares joint
ownership with Holcim of privately-held United Cement Company of
Nigeria. It owns 100 percent of the Lafarge South African
Roux said he expected the deal, which is still subject to
shareholders' and regulatory approvals, to close in the second
half of the year.
Shares in Lafarge Wapco, closed flat at 113 naira per share
valuing it at 337.6 billion naira while Ashaka Cement gained the
maximum 10 percent allowed to 25.99 naira.
(Editing by Tim Cocks, William Hardy and Kevin Liffey)