Dangote Cement signals start of bidding war for South African rival

Nigerian materials company Dangote Cement has followed Canada’s Fairfax Financial Holdings and AfriSam Group in making a takeover offer for PPC, South Africa’s largest cement maker.

Lagos-based Dangote has told the Nigerian stock exchange that it would like to buy PPC’s entire share capital. It added, however, that it was still at the "the preliminary stage" of any deal.

PPC’s deal with AfriSam is the revival of a merger that was first discussed in 2014. That deal was called off in 2015 over valuation disputes, but PPC made a statement in February that a "friendly" takeover was back on the agenda. Both companies are seeking to build up their balance sheet to compete in the fiercely competitive continental African market.

The company’s board made a statement last Thursday, saying: "The independent board of PPC is considering the indicative proposal and will make a further announcement in due course."

PPC’s and AfriSam’s largest shareholder, the Public Investment Corporation, supports the deal with AfriSam and Fairfax, Bloomberg reports.

LafargeHolcim, the world’s biggest cement maker, is also said to be monitoring the situation, according to unnamed Bloomberg sources.

Dangote Cement is Africa’s eighth largest company with operations in 15 countries employing more than 14,000 people. Turnover is around $2.5bn a year, and its owner, Aliko Dangote, is reportedly Africa’s richest man.

PPC, formerly Pretoria Portland Cement, has 11 factories in South Africa, Botswana, the Democratic Republic of Congo, Ethiopia, Rwanda and Zimbabwe.

Image: A "Transformers"-based advert for PPC

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