The Chinese firm acquiring Swiss company Holcim’s 83.81% stake in Nigeria-based Lafarge Africa Plc has disclosed its offer details to the cement-maker’s minority shareholders.
Huaxin Cement Co. agreed in November 2024 to buy Holcim’s stake for $838.13 million. Lafarge, Nigeria’s third-largest cement producer, sold 8.6 million tonnes in 2024, trailing Dangote’s 18.4 million tonnes and BUA’s 5.54 million tonnes.
With four plants in Nigeria spread across Sagamu and Ewekoro, Ogun state; Ashaka, Gombe state; and Mfamosing, Cross River state, Lafarge Africa PIc currently has an installed cement production capacity of 10.5 million tonnes per annum.
Huaxin’s move extends its African expansion, following acquisitions in Zambia, Malawi, South Africa, and Tanzania, further cementing China’s influence in Nigeria’s building materials sector.
Under Nigerian securities regulations, Huaxin’s purchase triggers a mandatory takeover offer (MTO) to Lafarge’s minority shareholders, who hold the remaining 16.19% stake. MTO rules ensure investors who chose to, can exit at the same price as Holcim.
At $838.13 million, Holcim gets $0.062072 (N92.8) per share, a 19.97% premium on the closing price of N77.5 per share and exchange rate of the deal’s February 26 “latest practicable date”.
Huaxin has confirmed minority shareholders will not be offered more than that amount. It said the MTO may result in Huaxin indirectly holding up to 100% of the shares of the Lafarge.
“As the Ultimate Target Company is listed on the Nigerian Stock Exchange, under the relevant rules of the Securities and Exchange Commission of Nigeria, the Closing of the Acquisition will trigger the obligation to make a MTO to the other shareholders of the Ultimate Target Company,” Huaxin’s board stated in an invitation to directors for an Extraordinary General Meeting (EGM) on March 19 at its Wuhan headquarters.
“The maximum consideration to be paid for the remaining 16.19% interest in LAP under the MTO is USD161.9 million… the offer price under the MTO will be no more than USD0.062072 per share.”
The board note, seen by Pluboard and signed by Chairman Xu Yongmo, outlines that the MTO must be completed within a year of the acquisition’s closing. The deal includes customary ‘leakage’ adjustments, such as dividends paid before the final closing.
The 19.97% premium falls short of the 60% forecast by the brokerage firm Meristem Securities Ltd., as the naira’s appreciation against the dollar eroded the expected value.
Discover more from Pluboard
Subscribe to get the latest posts sent to your email.