Dangote Cement Informs NSE Of Takeover Bid For South Africa’s Largest Cement Maker

by Ike Obudulu Posted on September 14th, 2017

Lagos, Nigeria. Sept 13th: In a statement to the Nigerian Stock Exchange today, Wednesday Lagos, Nigeria based Dangote Cement Plc  said it approached South Africa’s biggest cement maker PPC Limited’s board about a possible takeover deal.

Dangote communicated its interest to PPC Limited’s board “with respect to the acquisition of the entire share capital,” the statement said, adding  “This communication is still at the preliminary stage.”

The approach by the company owned by Aliko Dangote, Africa’s richest person, follows a joint offer from Canada’s Fairfax Financial Holdings Ltd. and domestic rival AfriSam Group Pty Ltd, signaling the start of a possible bidding war for South Africa’s biggest cement maker. While PPC Limited will consider all bids, the Public Investment Corp., its largest shareholder, supports a tie up with AfriSam and Fairfax, people familiar with the matter said this week.

PPC Limited shares fell 0.3 percent to 5.96 rand by close in Johannesburg, paring gains in the past month to 59 percent and valuing the company at 9.5 billion rand ($721 million). Dangote, listed in Lagos, has a market capitalization of $9.9 billion.

PPC Limited is the holding company for a group of companies which manufacture and distribute cement, lime and limestone products throughout South Africa. The Group also manufactures and supplies paper sacks and containers for use in the cement and other industries. In addition, PPC has investments in businesses supplying cement based products.

Canadian company  Fairfax Financial Holdings Limited (TSX:FFH) (TSX:FFH.U) is a holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management.

AfriSam (South Africa) Proprietary Limited manufactures and supplies construction materials. The company offers all purpose, eco building, high strength, rapid hard, and road stab cements, as well as slagments; concrete premixes; and plaster, building, and screed mixes. It also provides foundation, suspended slab, surface bed, post tension, retainer, and customized mixes, as well as specialty products and pumping solutions; and aggregate products, such as road stones, concrete aggregates, road layer works materials, and specialty aggregates. In addition, the company provides technical services. It serves architects, engineers, home builders, and DIY enthusiasts in Southern Africa.

Photo: Dangote Cement Plant

Dangote Cement is a fully integrated cement company and has projects and operations in Nigeria and 14 other African countries; Dangote Cement’s current total production capacity in Nigeria from its three existing cement plants namely Obajana (10.25MMTPA), Ibese (6.0MMTPA) and Gboko (4.0MMTPA) is 20.25MMTPA. The Obajana Cement Plant (OCP) located in Kogi State is reputed to be one of the single largest cement plants in the world with a combined capacity of 10.25MMTPA. A fourth line which add 3.0MMTPA to the existing capacity will bring the total capacity of Obajana to 13.25MMTPA by 2015.

Dangote Cement is also the biggest quoted company in West Africa and the only Nigerian company on the Forbes Global 2000 Companies.

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