Lafarge is foreign-owned. Why is Senate suddenly afraid of sale to China?

The Nigerian Senate’s Thursday debate over the proposed sale of Lafarge Africa, the country’s third-largest cement producer, to a Chinese firm has raised speculation about the true motivations behind the lawmakers’ concerns.

On Thursday, senators deliberated on a motion urging regulatory agencies—the Bureau of Public Enterprises (BPE) and the Securities and Exchange Commission (SEC)—to ensure the sale aligns with national security and economic interests. The Senate’s Committee on Capital Market was also mandated to oversee the process.

While some lawmakers emphasized the need for transparency and local participation, others warned against unwarranted interference in a legitimate business transaction. However, what remains unclear is why the Senate is suddenly alarmed about foreign ownership when Lafarge Africa has been owned by Swiss multinational Holcim AG for years without similar opposition.

Lafarge Africa, a publicly listed company, has been majority-owned by the Swiss firm Holcim AG, which is finalizing the sale of its 83.8% stake to China’s Huaxin Cement Co. for $1 billion. The transaction, expected to be completed in 2025, is subject to regulatory approvals.

In a note seen by Pluboard, Huaxin said it will offer Lafarge’s minority investors an offer not exceeding $0.062072 per share, matching Holcim’s price, with a 19.97% premium at the applicable exchange rate.

Senator Shuaib Salisu (APC, Ogun Central), who sponsored the motion, argued that foreign dominance in Nigeria’s cement industry threatens economic sovereignty. He claimed that some Nigerian investors had expressed interest in acquiring the stake but were unable to participate due to a lack of transparency.

“The dominance of foreign ownership in such a sensitive sector poses risks to Nigeria’s economic sovereignty and national security interests. Several local investors and stakeholders have expressed interest in the divestment process but have raised concerns about transparency and their limited access to equitable shares,” Salisu said, according to Premium Times.

Senator Solomon Olamilekan (APC, Ogun West) backed the motion, citing the need for openness and national security considerations. “The divestment has been in secrecy. We want a transparent situation where every Nigerian will be given opportunities in the sale of the company,” he said.

While transparency in major transactions is crucial, the Senate’s sudden concern over foreign ownership raises questions as Lafarge Africa has been foreign-owned for years without these fears.

Holcim merged with Lafarge in 2015 and later consolidated its African business, including Lafarge’s operations in Nigeria. The merger created LafargeHolcim, later rebranded as Holcim Group in 2021. Lafarge Africa integrated key Nigerian assets, including WAPCO, Atlas Cement (Port Harcourt), and UNICEM (Calabar).

The Nigerian cement market is led by Dangote Cement and BUA Cement. Lafarge sold 8.6 million tonnes in 2024, trailing Dangote’s 18.4 million tonnes and BUA’s 5.54 million tonnes.

Competition

Unlike Holcim, which maintained a more passive market position, Huaxin Cement, one of China’s largest cement manufacturers, — if given regulatory approval — could disrupt the market dynamics, analysts suggest.

The Shanghai-listed firm has been expanding across Africa since 2020, acquiring Kenya’s ARM Cement unit in Tanzania, Lafarge Zambia (75%), and Lafarge Cement Malawi (100%). In 2023, it also took over Brazil-based InterCement’s operations in South Africa and Mozambique.

“Huaxin is looking to expand aggressively in Africa, unlike Holcim, which was exiting the market,” James Ola-Adisa, an industrial analyst at Chapel Hill Denham, told Africa Report. Holcim had already divested its businesses in Uganda and Tanzania before this latest sale.

Lafarge Africa CEO Lolu Alade-Akinyemi sees the transition as an opportunity to grow with Huaxin’s investment and expertise.

Senate Concern

At the Senate, Jimoh Ibrahim (APC, Ondo South) was among those who opposed the motion, cautioning against unnecessary Senate interference in business transactions.

“We must be guided as a Senate. We cannot convert this Senate to a sales Senate. Agencies of government have been established by law and we cannot sit as a Senate to judge them in commercial transactions,” he argued.

Similarly, Senator Binos Yaroe (PDP, Adamawa Central) noted that company ownership changes are standard business practice.

“This company is a public company listed on the Nigerian Stock Exchange. It has changed whole ownership before, and companies will continue to evolve. Shareholders will exit, and the company will find another company to take over. I want us to be cautious about not giving the impression that we’re hampering foreign investors,” Yaroe said.

Despite opposition, the majority of senators supported the motion, and the resolution was passed. However, Senate President Godswill Akpabio clarified that the legislative body was not blocking the sale but ensuring that it followed due process and considered local content.

“What we have said is that if you want to sell, you can sell, but make the process transparent and ensure local content and national security. The process must be transparent, particularly when there are legal investors,” Akpabio said.