South Africa’s largest cement maker, PPC might be adding itself to the portfolio of companies under Dangote Industries.
Aliko Dangote, Africa’s richest man is said to be looking at acquiring majority shares in the company.
Should Dangote’s hunt for PPC becomes successful, his company, Dangote Cement will become the largest cement company in Africa dwarfing LafargeHolcim, the French cement maker with majority shares in Lafarge Africa.
Dangote has in recent times focused his strategy on gaining majority market share in cement production, a move that has seen his company, Dangote Cement exporting the product from its Nigerian factories. His recent take on the oil refining end of the energy sector with the construction of the largest refinery in Africa in Lagos, Nigeria’s commercial capital will see his empire swell beyond projections.
According to Forbes Magazine, Aliko Dangote, Chairman of the Dangote Group is with about USD11 billion, a networth pummeled by the crash in the value of the Naira, after it lost over 70% of its value in the second quarter of 2016.
PPC has not issued a definitive statement on the matter but analysts claim the deal might see the light of the day given the willingness of its key shareholders such as Fairfax who are open to a sell off.
As it stands, PPC is the largest cement maker in the southern African region Africa. The group also produce aggregates, metallurgical-grade lime, burnt dolomite and limestone.
To fund an acquisition of this magnitude, it will not be out of place that Dangote Cement might have to sell more debt to pull this through. There are alternatives on the table. An equity analyst who covers construction and commodities said Dangote might take the PPC private for some years by getting private investors to acquire the company alongside Dangote Industries, Dangote’s own company with which he has majority shares in all the companies in his group.
Should go this route, the company would have increased in value thereby selling in a new IPO that will benefit Dangote’s company.
The next coming weeks will see how the deal might either cascade to a done deal or no deal.
South Africa’s Competition Commission has been recognized as a thorough organization that prevents the negative effects of what this kinds of monopolies might have smaller entities and the end consumer from a bigger picture.