Senate panel to summon Nigeria’s third-largest cement producer over proposed sale to Chinese firm

The Senate Committee on Capital Market has said it would invite Lafarge Africa Plc for questioning over its proposed sale to a Chinese firm to ensure shareholder rights, and transparency of foreign dominance in Nigeria’s cement industry.

The Chairperson of the Committee, Osita Izunaso, disclosed this during an interactive session with officials of the Securities and Exchange Commission (SEC), the Bureau of Public Enterprises (BPE), and the Federal Competition and Consumer Protection Commission (FCCPC) at the National Assembly complex in Abuja on Wednesday.

“We are going to invite Lafarge and hear from them. Then, come back to the Corporate Affairs Commission (CAC) to look at the share structure. We will take it from there,” he said.

Mr Izunaso, who represents Imo West Senatorial District, also hinted at the possibility of a public hearing on the proposed sale, stating that if necessary, the Senate would open the process to public scrutiny.

“Then, thereafter, if there’s a need for a public hearing, we will call for a public hearing and if there’s no need for a public hearing then we can resolve it amicably,” the senator added.

Lafarge Africa Plc, Nigeria’s third-largest cement manufacturer by market capitalisation, is a subsidiary of Holcim AG, a global building materials company. Holcim is reportedly finalising a $1 billion deal to divest its 83.8 per cent stake in Lafarge Africa to Huaxin Cement Co., a Chinese firm. The transaction, which is still subject to regulatory approval, is expected to close in 2025.

Concerns about the proposed sale have been debated in the Nigerian Senate in March when the Ogun Central senator, Shuaib Salisu, sponsored a motion to address issues such as lack of transparency in the divestment process and limited access to the deal for Nigerian investors.

On 28 March when the proposed sale was debated on the floor of the Senate, the lawmakers were divided on their positions. While some urged caution against obstructing legitimate private sector transactions and foreign investment, the majority emphasised the need for government oversight.

After the debate on that day, the Senate directed the BPE and the SEC to ensure the sale aligns with Nigeria’s economic and national security interests and mandated its Capital Market Committee to liaise with all relevant agencies for proper scrutiny.

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Concerns about Lafarge

Lafarge Africa, a leading player in Nigeria’s cement industry, is a subsidiary of Holcim AG, a multinational building materials giant. It is listed on the Nigerian Stock Exchange.

Holcim AG is reportedly finalising plans to sell its 83.8 per cent stake in Lafarge Africa to China’s Huaxin Cement Co. in a $1 billion deal, expected to be completed in 2025, subject to regulatory approvals.

Lafarge is Nigeria’s third-largest cement manufacturer by market capitalisation behind only Dangote Cement and BUA Cement. Lafarge’s market capitalisation as of 26 March is N1.19 trillion, behind Dangote, N7.24 trillion, and BUA, N2.55 trillion.

Lafarge Africa has many factories in Nigeria with cement operations in the South-west (Ewekoro and Sagamu in Ogun State), North-east (Ashaka, in Gombe State), and South-east (Mfamosing, Cross Rivers State). It also has Ready-Mix operations in Lagos, Abuja and Port Harcourt. It has a current installed cement production capacity of 10.5 metric tonnes per annum.

No formal request for the sale of Lafarge

During the session, the Director General of SEC, Emmanuel Agama, clarified that the commission has not received any application regarding the sale of the cement company.

Mr Agama was represented by Director of Securities and Investment Services of the SEC, Abdulkabir Abbas.

“As part of the internal restructuring, the 27.77 per cent equity stake held by Associated International Cement Limited was transferred to another Holcim-owned entity. Davis Peak Holdings Limited. There has been no change in the ultimate beneficial ownership of the shares as a result of this transaction.

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“In light of the foregoing, the Commission wishes to clarify that no format filing has been made with respect to any proposed sale of Lafarge Africa Pic to Chinese investors,” he said.

The BPE Director of Post-Transaction, Satura Bello, also clarified that the shares being divested belong to Lafarge Africa Plc and not the 16.19 per cent of shares held by Nigerian investors.

Mrs Belo emphasised that the Nigerian shareholders’ stake remains intact.

After the submissions of the SEC and BPE, the Senate committee chairman said the lawmakers would invite management of the Lafarge Africa Plc for questioning and further clarification.

He, thereafter, directed the committee’s clerk to request detailed information from the CAC on the ownership structure and any divestment activities related to Lafarge Africa.