Emmanuel OchayiInvestors Position for Gains in $1 Billion Deal
The Nigerian equity market began the week on a high note, with Lafarge Africa Plc leading the charge as news broke about Huaxin Cement’s plan to acquire a majority stake in the company. This significant development saw investors rally around the cement maker, propelling its stock price by 10% on the Nigerian Exchange Limited (NGX).
“The equity market is experiencing a renewed sense of optimism, largely fueled by this acquisition deal,” said Kemi Adedeji, a Lagos-based investment analyst.
Join our WhatsApp ChannelLafarge Africa Stock Price Soars
At the close of trading on Monday, Lafarge Africa’s share price rose from ₦58 to ₦63.80, marking a 10% increase and contributing to a market gain of ₦138 billion. The NGX All-Share Index also climbed by 0.23%, bringing the year-to-date return to 30.71%.
Huaxin Cement, a leading Chinese corporation, plans to acquire an 83.81% stake in Lafarge Africa from its current Swiss owner, Holcim Group. The deal, valued at $1 billion, is set to redefine Lafarge Africa’s operational trajectory.
“This acquisition shows the potential of Nigeria’s equity market to attract international investments,” added Adedeji.
Details of the Transaction
Holcim, through its subsidiaries Caricement B.V. and Associated International Cement Limited, owns the controlling stake in Lafarge Africa. These entities hold 56.04% and 27.77% shares, respectively. Huaxin Cement intends to purchase these shares through its subsidiaries, Hainan Huaxin Pan-Africa Investment Co. Limited and Huaxin (Hong Kong) International Holdings Limited.
“The valuation of Lafarge Africa at $1 billion underscores the growing confidence in Nigeria’s industrial sector,” stated Chike Obi, a capital markets expert.
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Market Capitalisation and Stock Activity
The NGX equities market capitalisation grew from ₦59.107 trillion to ₦59.245 trillion, while the All-Share Index increased from 97,506.87 points to 97,733.86 points. Beyond Lafarge Africa, other notable gainers included Abbey Mortgage Bank, which rose by 10%, and African Prudential, which added 90 kobo to close at ₦9.90.
Trading activity was robust, with 451,165,300 shares valued at ₦10.150 billion exchanged in 9,329 deals. Stocks of companies like Japaul Gold, UBA, Access Holdings, and GTCO also witnessed significant trading volumes.
Regulatory Approval Pending
The deal is expected to close in 2025, subject to regulatory approval. Huaxin Cement has also expressed intentions to launch a Mandatory Takeover Offer (MTO) for minority shareholders in line with Nigerian laws.
“This is not just a corporate transaction; it’s a signal of confidence in Nigeria’s equity market. The coming years could see more global players taking interest in our markets,” remarked Obi.
Future of the Equity Market
The equity market’s performance underscores its resilience and ability to attract significant investments despite global economic uncertainties.
As trading continues, analysts believe the Lafarge-Huaxin deal could trigger further interest in Nigeria’s industrial stocks. “We anticipate a ripple effect across the equity market as investors look to replicate similar gains in other sectors,” said Adedeji.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
