A Federal High Court sitting in Lagos has given its final sanctions to the scheme of Merger between the Cement Company of Northern Nigeria (CCNN) and BUA Group’s Kalambaina Cement Company. This comes on the back of overwhelming Shareholder approval as well as final approvals by the regulators – The Securities & Exchange Commission and the Nigerian Stock Exchange. With this development, the Nigerian Stock Exchange is expected to list the shares of the expanded entity in what has been described by the regulator as the largest deal of the year in Nigeria in 2018 at its recently held NSE CEO Awards.
Speaking on this development, Abdul Samad Rabiu, Founder/Executive Chairman of BUA Group who is also the Chairman of CCNN, praised the effort of all stakeholders in bringing the merger to fruition. According to him, the expanded CCNN will remain the market leader in its regional market of North West Nigeria – which is the third largest market for cement in Nigeria by consumption, whilst continuing to explore the huge opportunities that exist in the export markets of Niger, Burkina Faso and the West African region.
“Traditionally, the huge cost of transportation to CCNN’s home region from other cement plants in Nigeria – the nearest being about 900km away – has always given us a strategic advantage in that region over competing cement companies and brands. The expanded entity will leverage on the cost and energy efficiency of the newly commissioned Kalambaina Plant whilst providing additional value through its products in terms of better quality, higher yields and a stronger cement than competing premium cement brands.”
With this merger, the total installed capacity of the merged entity will be 2 million metric tonnes per annum. This development will, therefore, bring the total capacity of BUA’s cement operations to 8 million MTPA as the group recently announced the completion of its 3 million MTP Obu II Cement Plant in Okpella Edo State.
This business combination is statutorily allowed but let us note that like some NSE listed public limited companies, CCNN has become a subsidiary of a sole Proprietor.Also, I think regulatory authorities have considered antitrust laws before approving these merger and acquisition , especially when it involves concentrating economic power to an individual in an environment where there is weak regulatory compliance and enforcement.