The Nigerian Senate recently approved the proposed $1 billion acquisition of Lafarge Africa Plc by Chinese cement giant, Hainan Huaxin Pan-African Investment Company Plc.
The approval followed the adoption of the report of its Ad-hoc Committee chaired by Senate Minority Leader, Senator Abba Moro, which was set up seven months ago to investigate the deal.
The deal involves the sale of Holcim AG’s 83.81% controlling stake in Lafarge Africa to Huaxin Cement Co. Holcim, a Swiss building materials company, is the parent company of Lafarge.
Presenting the report, Senator Moro said the committee engaged all relevant stakeholders and found no legal impediment to the transaction, describing it as a transfer of ownership from one foreign investor to another.
He said much of the public concern stemmed from the misconception that Lafarge Africa is wholly Nigerian-owned.
The Senate said the transaction will not affect the 16.19% equity held by Nigerian investors on the Nigerian Exchange (NGX), assuring that their stake remains intact and protected.
It however gave conditional approval, directing that the transaction must strictly comply with all extant Nigerian laws and due process for a hitch-free transition.
The upper chamber also mandated regulatory agencies including the Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC), Federal Competition and Consumer Protection Commission (FCCPC), Nigerian Investment Promotion Commission (NIPC) and the Bureau of Public Enterprises (BPE) to maintain rigorous oversight.
The committee further recommended that the new investors strengthen Corporate Social Responsibility (CSR) programmes in host communities where Lafarge operates, including Ewekoro and Sagamu in Ogun State, Ashaka in Gombe, and Mfamosing in Cross River State.
When concluded, the deal will make Huaxin the third largest player in Nigeria’s cement market with 10.5 million tonnes capacity, behind Dangote Cement and BUA Cement and rank as one of the largest Chinese investments in Nigeria’s manufacturing sector.
