Displaying items by tag: Merger

China: China National Building Material’s (CNBM) shareholders have approved a merger agreement between the company and China National Materials (Sinoma) at an extraordinary general meeting. The two companies formerly entered into a merger agreement in September 2017. The South Korean Fair Trade Commission approved the pending merger in early November 2017.

There are two significant cement producers around the world up for sale at the moment. Last week we dealt with India’s Binani Cement, which has so far attracted 15 separate bids from a number of international and domestic players. Now, we turn our attention to South Africa, where PPC remains the target of approaches by LafargeHolcim and CRH.

This week PPC rejected a partial offer from Canada’s Fairfax Holdings, which it considered neither fair nor reasonable. Like a mutual friend at a party that insists two people ‘really are perfect for each other,’ Fairfax had stipulated in its terms that PPC should merge with AfriSam to create a South African super-producer. It does not appear that this idea went down well and that particular combination now seems further away than ever.

When the news broke that it had rejected Fairfax, we thought that PPC’s stance seemed a little ‘too cool.’ However, looking just at the oversized and import-addled South African market does not give the full picture of what’s happening for PPC at the moment. It has significant and growing activities in the rest of Africa too.

Later this week PPC released its results for the first half of its 2018 fiscal year. Suddenly, its handling of the Fairfax offer made more sense. Over the six months to 30 September 2017, PPC nearly tripled its profit to US$21.1m. Crucially, sales from outside South Africa grew far more rapidly than those at home. While domestic earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 4%, EBITDA from elsewhere increased by 25%. These results bode well for a potential bidding war that now favours PPC.

Even from this greatly enhanced position, PPC was not finished with its announcements for the week. Today it revealed that it plans to build a new ‘mega-factory’ in the Western Cape. Johan Claassen, the interim chief executive of PPC, said there would probably be a formal announcement about new capacity in the Western Cape in 2018. He said that PPC had decided to conduct a feasibility study into a possible replacement for its Riebeeck plant. An Environmental Impact Assessment (EIA) is in progress and the plant is reported to be ‘semi-brownfield.’ Claassen said that the new facility would use around 25% of the current Riebeeck equipment and cost US$200/t of installed capacity.

The news of its results and announcement of the new plant represent a good PR move by PPC given the difficulties faced by the wider South African market. The new information will certainly give cause for CRH and LafargeHolcim to think again about the values of their offers, should PPC also be of the view that these also undervalue the company.

South Africa: PPC has said that its independent board would not recommend Canadian firm Fairfax Africa Investments' partial offer to shareholders, considering it neither fair nor reasonable. In September 2017 Fairfax offered to buy 22% of PPC for US$144m on the condition that PPC accepted a merger proposal with rival AfriSam.

"The Independent Expert, having considered two possible outcomes of the proposed merger, is of the opinion that the partial offer, both in the context of the proposed merger as well as on a stand-alone basis, is not fair and reasonable," said PPC in a statement.

Nigeria: The shareholders of Lafarge Africa have approved the merger with United Cement Company of Nigeria (Unicem) and Atlas Cement. Lafarge Africa chairman Bolaji Balogun said that the merger would streamline its operations and reduce its costs, according to the Nigerian Guardian newspaper. Lafarge Africa is the sole shareholder of Unicem and Atlas Cement.

Unicem operates the 5Mt/yr Mfamsoing cement plant at Calabar in Cross River State. Atlas Cement runs a 0.5Mt/yr terminal in Rivers State at the Federal Ocean Terminal in Onne. It originally supplied Ordinary Portland Cement but is now changing its market to the oil and gas sector.

Egypt: The board of directors of Suez Cement has agreed to merge with Helwan Cement. It also agreed to sell a 5% stake in Tura Cement. Both Suez Cement and Helwan Cement are owned by HeidelbergCement. Suez Cement operates two plants at Suez and Kattameya. Helwan Cement runs a single plant at Helwan.

South Korea: The South Korean Fair Trade Commission has approved the pending merger of China National Building Material (CNBM) and China National Materials (Sinoma). CNBM and Sinoma formerly entered into a merger agreement in September 2017.

South Africa: The Public Investment Corporation (PIC) has been steadily increasing its shareholding in cement producer PPC. It now owns a 25.1% stake. In March 2017, the PIC increased its shareholding in PPC to 15.1% and subsequently increased it further to 21.2% in October 2017.

UK: RHI Magnesita has started trading on the London Stock Exchange (LSE). It has been admitted to trading in the premium segment of the main market on the LSE. The start of trading on the exchange marks the completion of the merger process between RHI and Magnesita.

“After the successful combination, RHI Magnesita is now fully dedicated to the strategic repositioning as the global leader in the refractory industry. With our 14,000 employees, we can drive positive change in our industry and aim to offer our customers an even greater value proposition in the future,” said Herbert Cordt, chairman of the board of directors of RHI Magnesita,

Following the merger the new company leads the refractory industry. It holds 35 raw material and production plants and more than 70 sales offices around the world and its product portfolio comprises more than 120,000 individual refractory products. It also operates two main research and development centres in Leoben, Austria and Contagem, Brazil.

As part of the merger process the company has also unveiled a new brand and logo to represent its global presence, its innovation and its company mind-set. The new logo and the visual system based on it consist of a horizontal eight, the symbol of infinity, and the shapes of refractory bricks.

Europe: The closing date of the merger between refractory manufacturers RHI and Magnesita is expected to be 26 October 2017. This follows approval by the Dutch Authority for the Financial Markets (AFM) for the prospectus for admission to listing of RHI Magnesita shares on the Premium Listing segment of the Official List of the UK Financial Conduct Authority and to trading on the London Stock Exchange’s (LSE) Main Market for listed securities. The new company, RHI Magnesita, will start trading on the LSE on 27 October 2017.

Saudi Arabia: Jihad Al Rashid, the head of the Saudi National Committee for Cement Companies, has said that the local market only needs four large cement producers. He added that the industry does not need the 17 cement companies it has at present, according to the Al Eqtisadiah newspaper. The owners and shareholders of these companies are ‘seriously’ considering merger options. Al Rashid also said that the government and consumers would benefit from a consolidated industry.