LAGOS, AUGUST 7, 2017 – Lafarge Africa is seeking regulatory approval to merge its Nigerian operations with two of its local subsidiaries, it said in a stock exchange filing on Monday.
Lafarge has been consolidating its business on the continent to cut costs and streamline operations to take-on competition, particularly from arch-rival Dangote Cement, owned by Africa’s richest man Aliko Dangote, which is also expanding.
The cement mixer said its board has asked the company to “undertake a business combination with United Cement Company of Nigeria Limited (Unicem) and Atlas Cement Company Limited (Atlas).” It did not give a reason for the merger.
The Nigeria-based business of the Franco-Swiss cement group, LafargeHolcim, is seeking approval from Nigeria’s Securities and Exchange Commission (SEC) for the merger.
Lafarge Africa own 100 percent in Atlas and Unicem, the country’s third largest cement plant.
Holcim Nigeria, now part of Lafarge Africa, has said it will pass a resolution this month to dissolve the company after its Swiss-based parent firm merged with French rival Lafarge two years ago.
The company expects to generate cost saving synergies of 9 billion naira by 2018 in Nigeria, it has said, following the mega global merger two years ago.
Shares in Lafarge Africa gained 1.69 percent on Monday, adding to a 44 percent rise so far this year, valuing the cement firm at 329.2 billion naira ($902.3 mln).
LafargeHolcim Chairman Beat Hess has said the company was still adjusting its structures in big markets where both Lafarge and Holcim were present following the merger.
Lafarge Africa is raising 140 billion naira in fresh equity and will convert some loans into shares as part of a planned rights issue after it reported losses last year.
LafargeHolcim has said it will take part in a capital increase of the Nigerian unit to avoid diluting its nearly 73 percent stake, in a move which would also help simplify the ownership structure in Nigeria.
Lafarge Africa last month delisted Lagos-listed Ashaka Cement from the stock exchange after it merged it with its local operations.
Lafarge combined its Nigerian business with its South African operations in 2014 and listed the combined entity, which it renamed Lafarge Africa on the Lagos stock exchange.