New entity to be listed on the Nigerian stock exchange.
Lafarge SA, the French cement maker that plans to merge with Holcim Ltd. of Switzerland to become the world's biggest, will consolidate some African operations under a new entity to be listed on the Nigerian stock exchange.
Assets in Nigeria and South Africa will be transferred to the newly created Lafarge Africa, the Paris-based company said in a statement today. The combined business will be the sixth largest company on the Nigerian stock exchange and have cement production capacity of 12 million metric tons.
"It will provide access to growth in two of the largest economies on the continent," Olusegun Osunkeye, chairman of Lafarge's Nigerian unit WAPCO, said in the statement. "It will mean that our shareholders are invested in a larger and more geographically diverse business."
Lafarge, which has operations in 64 countries, has been adding capacity in Africa to take advantage of the need for new infrastructure in developing economies and to offset a construction slump in Europe. It's facing battles with regulators in Kenya, where it has been accused of flouting competition rules, and Nigeria, where its main grade of cement has been ruled unsafe for anything other than plastering.
The transaction will include a cash payment of $200 million and the issue of 1.4 million Lafarge Africa shares to the parent company. Lafarge's Nigeria-listed shares were unchanged at 112.5 naira in Lagos today, valuing it at 338 billion naira ($2.1 billion).