LafargeHolcim says talks to acquire a stake in cement maker PPC are still ongoing after announcing interest in the cement company in October.
BY TATIRA ZWINOIRA
In October, PPC Limited received an expression of interest letter from LafargeHolcim to purchase a stake in the company in what would widen the Swiss-based global building materials giant’s footprint in Africa.
In emailed responses to Standardbusiness on Thursday, LafargeHolcim confirmed that they were still in talks with PPC Limited but declined to offer any more information.
“No agreement with PPC has been reached as yet and no assurance can be given at this stage that a transaction will materialise.
“These discussions are at a very premature stage and shareholders cannot confirm at this point whether the discussion will be fruitful or not,” LafargeHolcim said.
When pressed further, LafargeHolcim spokesperson Eike Christian Meuter said “I am afraid that we are not commenting beyond this statement (referring to the announcement of discussions with PPC in October)”.
In the expression of interest from LafargeHolcim, the company offered PPC a combination of certain African assets, a partial cash offer and a special dividend.
However, PPC Limited group manager of investor relations Anashrin Pillay did not explain what this offer entailed.
“PPC received a non-binding expression of interest from LafargeHolcim, this means they have indicated that they are interested in PPC, but that they have not made a firm offer,” Pillay said.
“They may proceed with the next step, which is to make a firm offer or they may choose not to make a firm offer.
“The process of acquiring a stake in PPC requires the approval of shareholders.”
PPC has established a huge footprint in Africa having been founded in 1892 with operations in South Africa, Botswana, Zimbabwe, the Democratic Republic of Congo, Rwanda and Ethiopia.
The cement company in these regions is arguably the main competition for LafargeHolcim even though LafargeHolcim operates in more African countries.
Analysts say by purchasing a stake in PPC this would undoubtedly give LafargeHolcim a bigger monopoly on the continent while offering capital to the African cement company.
Pillay said PPC remained a solid business well-positioned to deliver long-term sustainable shareholder value as a standalone company.
“The company’s interim results, presented in Johannesburg on November 23, confirm that the company’s expansion strategy is the correct one as the company has started reaping the benefits of its new operations in Harare, Rwanda, DRC and Ethiopia and looks set to continue improving profitability,” Pillay said.
Apart from LafargeHolcim, Canadian and Irish-based companies Fairfax Africa Holdings Corporation and CRH Plc respectively have also made offers to PPC.