Following the merger of its two cement subsidiaries comprising the publicly listed Cement Company of Northern Nigeria Plc (CCNN) with two million metric tonnes per annum (mtpa) capacity and the 6-million mtpa Obu Cement Company Plc , BUA Cement has announced that it would today list the combined entity on the Nigerian Stock Exchange (NSE).
In a statement yesterday, the Group said the move was in line with its vision to unlock opportunities inherent in the business space in Africa for Africans by Africans through its strategic investments in key industries within Nigeria and across the continent.
It would be recalled that on December 4, 2019, shareholders of CCNN and Obu Cement overwhelmingly voted in favor of a business merger at their respective General Meetings. This was followed by relevant approvals by the courts and regulators.
The size of the merger deal is about N1.18trillion or $3.29billion while the current volume of shares for total combined entity (BUA cement) is 33,864,354,060 total entity shares i.e. 13,143,500,966 CCNN shares + 20,720,853,094 shares of BUA OBU Cement Shares
The new entity, BUA Cement, will be the second largest producer of cement in Nigeria by Volume with factories in Sokoto State, North West Nigeria (2million mtpa) and Okpella Edo State, South South Nigeria (6million mtpa). A new 3million mtpa plant currently being constructed is scheduled to be operational in 2020 in Sokoto State.
BUA Cement also has the benefit of market leadership positions in its key regional markets of the North West, South South and South East Nigeria due to its location and proximity to those markets. It also has a huge export market in Western Africa.
Commenting on the merger, Founder and executive chairman of BUA Group Abdul Samad Rabiu, said: “This consolidation marked the culmination of the first phase of the BUA mid-term strategic plan for its cement businesses, which currently include four cement plants spread across Obu Cement Company and the Cement Company of Northern Nigeria.”
According to Rabiu, a new $450million Sokoto Kalambaina II Plant is scheduled to come on stream in the second half of 2020 alongside another 48MW power plant to complement the existing assets and take advantage of a growing cement market in Northern Nigeria and the West African region.
“This consolidation will cement BUA’s position as the second largest cement producer in Nigeria whilst also positioning it to take advantage of the combined synergies to effectively serve Northern and Southern Nigeria based on the strategic locations of these plants – as well as a sizeable export market,” Rabiu said, in a filing to regulators.
“We intend to continue creating value for the benefit of shareholders of the consolidated company by maintaining our focus on outperforming the Nigerian cement industry across key indices through a laserlike commitment to excellent products and service delivery, operational efficiency as well as maintaining our leadership position in our home markets,” he added.