Chinese Cement Company Set to Take Over Dangote Cement Rival, Lafarge Africa in a $1bn Deal
- Holcim AG has agreed to sell its 83.8% stake in Lafarge Africa to a Chinese cement company, Huaxim Cement Co
- The deal is reportedly valued at $1 billion and would be finalised in 2025, subject to regulatory approval
- The deal will see Lagarge’s market capitalisation on the Nigerian Exchange Limited (NGX) double if the new owners do not delist from the NGX
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Holcim AG will sell its 83.8% share in Lafarge Africa to Huaxin Cement Co., a Chinese cement company, in a $1 billion deal.
A statement by the group on Sunday, December 1, 2024, disclosed that the deal will be finalised in 2025, subject to regulatory approval.
Source: Getty Images
The new deal to double Lafarge’s value on NGX
If the new owners do not delist from the Nigerian Exchange Limited (NGX), the deal will double Lagarge's market capitalisation on the NGX.
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Lafarge is currently valued at N934 billion, about $556 million on the NGX.
Holcim’s move follows a trend of several divestment steps by the company.
According to reports, in 2021, Holcim divested from its Zambian operations by selling Lafarge Zambia to the same Hauxin Cement Co.
The firm owned a 75% stake in Lafarge Zambia. However, the shares were sold in a deal that valued the Zambian arm at $100 million.
The company’s sale to Huaxin will mark the entry of Chinese companies into Nigeria’s growing cement industry, which is dominated mainly by Dangote Cement, Africa’s largest cement maker.
Dangote Cement is one of the most valuable companies on the NGX, apart from Seplate Nigeria.
Dangote Cement is valued at over N8 trillion and is Africa's most significant manufacturer.
Founded in 1907, Huaxin is one of China's top 10 cement manufacturers. The firm is listed on the Shanghai Stock Exchange and boasts a market cap of $2.18 billion.
Larfage’s market capitalisation
In the nine months ending September 30, 2024, Huaxin generated revenue of $3.4 billion and posted a net profit of $157 million.
During the review period, Lafarge Africa's revenue surged to N479.5 billion, and its net income was N60.1 billion.
Lafarge boasts a higher profitability margin, which makes it an attractive acquisition for Huaxin as it prepares to boost overall profit margins.
Holcim’s move to divest from Nigeria follows a trend of foreign firms, mainly European and American companies, exiting Nigeria.
New cement firm emerges as Dangote, others production cost grow
Legit.ng earlier reported that Nigeria’s cement manufacturing firms have seen a rise in their production costs
The cement firms Dangote, BUA, and Lafarge saw their production costs soar by 97% in the year's first half.
The development follows the emergence of a new cement firm, Mangal Ceement, which analysts believe will change Nigeria's cement pricing equation.
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Source: Legit.ng
