In a groundbreaking transaction, Huaxin Cement, a leading Chinese cement manufacturer, is set to acquire an 83.81% stake in Lafarge Africa Plc from Holcim Group. The deal, announced on December 1, 2024, involves the transfer of shares held by Caricement B.V. and Associated International Cement Limited (AICL), both subsidiaries of Holcim Group. This acquisition signals Huaxin’s strategic expansion into Sub-Saharan Africa and marks a significant shift in Nigeria’s construction and building materials industry.
Details of the Transaction
- Key Parties Involved:
- Seller: Holcim Group, through subsidiaries Caricement B.V. and AICL.
- Buyer: Hainan Huaxin Pan-Africa Investment Co. Limited and Huaxin (Hong Kong) International Holdings Limited, subsidiaries of Huaxin Cement.
- Transaction Structure:
- Full acquisition of Caricement, which holds a majority stake in Lafarge Africa Plc.
- Acquisition of Davis Peak Holdings Limited, which will hold AICL’s shares in Lafarge Africa Plc.
- Stake Acquired: A combined 83.81% shareholding in Lafarge Africa Plc.
- Regulatory Approvals: The deal is subject to regulatory clearance in Nigeria and is expected to close in 2025.
Post-Acquisition Plans
- Mandatory Takeover Offer:
Upon completion, Huaxin Cement plans to launch a mandatory takeover offer in compliance with Nigerian securities regulations. This move aligns with regulatory requirements for listed entities on the Nigerian Exchange Group (NGX). - Listing Status:
Lafarge Africa Plc will remain listed on the NGX, ensuring transparency and continued access to public markets.
Strategic Implications
For Lafarge Africa Plc
The acquisition is expected to infuse new investments and operational strategies into Lafarge Africa Plc. Huaxin Cement’s entry could accelerate technological advancements, enhance production efficiency, and drive innovation in building materials across Nigeria.
For Huaxin Cement
This acquisition bolsters Huaxin Cement’s global expansion strategy, positioning the company as a significant player in Sub-Saharan Africa. With Nigeria being Africa’s largest economy, the deal provides Huaxin Cement with a strategic foothold in a rapidly urbanizing region.
For Holcim Group
The divestment allows Holcim to focus on its sustainability agenda, including low-carbon solutions and circular technologies, as part of its global decarbonization strategy.
About Lafarge Africa Plc
Lafarge Africa Plc is one of Nigeria’s leading building solutions companies, with a strong presence across the country:
- Cement Operations: Facilities in Ogun, Gombe, and Cross Rivers States.
- Ready-Mix Operations: Sites in Lagos, Abuja, and Port Harcourt.
- Production Capacity: Installed cement production capacity of 10.5 million metric tons per annum (Mtpa).
- Innovation and Sustainability: Lafarge leverages cutting-edge technology to deliver value-added products and services in the construction industry.
About Holcim Group
Holcim is a global leader in sustainable building solutions, with net sales of CHF 27 billion in 2023. Its innovative offerings, such as ECOPact and ECOPlanet, drive decarbonization and energy efficiency in construction. The company operates across 70 countries, employing over 63,000 people.
Investor Perspective
The acquisition has significant implications for investors:
- Enhanced Value Proposition: Huaxin Cement’s expertise and investment in Lafarge Africa Plc are likely to enhance operational efficiency and market share in Nigeria.
- Strategic Growth: The deal positions Lafarge Africa for expanded growth in Nigeria’s construction sector, driven by urbanization and infrastructure development.
- Regulatory Transparency: The mandatory takeover offer ensures compliance with Nigerian laws, protecting minority shareholders and maintaining transparency.
Conclusion
The acquisition of Lafarge Africa Plc by Huaxin Cement marks a pivotal moment for Nigeria’s construction industry. With Huaxin’s proven track record in innovation and efficiency, this deal is poised to bring significant operational and strategic benefits to Lafarge Africa. For stakeholders, this development underscores the growing attractiveness of Nigeria as a destination for international investment in the construction sector.
Stay tuned for more updates on the transaction and its regulatory progress.
