Dipo Olowookere
By Dipo Olowookere
The management of Cement Company of Northern Nigeria (CCNN) Plc has confirmed merging with a subsidiary of BUA Cement Company Limited, Kalambaina Cement Company Limited (Kalambaina Cement).
The aim of this merger, Business Post gathered, is to boost operations of CCNN, a company listed on the trading platform of the Nigerian Stock Exchange (NSE).
Shares of CCNN closed flat at the market today at N23.50k per share, while share price of its main industry competitor, Dangote Cement, finished at N225 per share. Dangote Cement controls over 60 percent of the cement market in the country.
A statement issued today on the NSE disclosed that the merger between CCNN and BUA Cement is still subject to approvals of the relevant regulatory agencies and shareholders.
However, the boards of directors of CCNN and Kalambaina Cement have agreed to the deal.
Kalambaina Cement is a wholly owned subsidiary of BUA Cement Company Limited.
According to the statement, both boards are resolute in their aspiration to strengthen the competitive position of the enlarged company among cement manufacturers in Nigeria.
“It is in furtherance of this aspiration and a collective vision to create value for all key stakeholders of both companies that the proposed merger is being considered.
“The Proposed Merger provides a compelling opportunity to capture significant synergies and create value for the benefit of the shareholders of both companies in the form of stronger competitive position of the enlarged company, economies of scale, enhanced operations and administrative efficiencies which are expected to accrue from the Proposed Merger.
“As consideration for the Proposed Merger, the shares of CCNN will be issued and allotted to all shareholders of Kalambaina Cement in exchange for their shares in Kalambaina Cement at an agreed ratio based on CCNN’s 30-day volume weighted average closing price (VWAP) to June 22, 2018 of N25.99k per share.
“It is proposed that each shareholder in Kalambaina Cement shall be entitled to receive 19,811,372 new ordinary shares of CCNN for every 100,000 Kalambaina Cement shares.
“Should the necessary regulatory approvals, including those of the NSE and the Securities and Exchange Commission (SEC) be received, the parties will take further steps to consummate the proposed combination including obtaining the approval of their respective shareholders at separate Court-Ordered Meetings,” the statement said.
