The marriage of two cement subsidiaries under Abdulsamad Rabiu-led BUA Group – Cement Company of Northern Nigeria Plc (CCNN) and Obu Cement Company Limited – into a single entity was perfected earlier today at the Nigerian Stock Exchange (NSE), lifting the market capitalisation by a staggering N1.18 trillion (about $3.3 billion).
The development, itself the first listing of the year, is anticipated to be a plus to the NSE, hailed by Bloomberg as the best performing sub-Saharan Africa stock market this year, and catapult it beyond the N15 trillion mark.
The deal brought the shutters down on CCNN (also known as Sokoto Cement), which listed on the Exchange in October 1993, and ushered in a new corporate entity to be known as BUA Cement Plc. By reason of the merger, shareholders of the defunct CCNN are now shareholders of BUA Cement, holding the same units of stock as of old as the combined ordinary shares of the company now stand at 33.8 billion.
Today’s listing makes BUA Cement the second biggest cement maker in the country by market capitalisation and welcomes it to the rank of the five most capitalised companies (each with a minimum market capitalisation of N1 trillion) on the NSE where the likes of Dangote Cement, Airtel Africa, MTN Nigeria and Nestle hold sway.
The two firms had, on 4th December 2019, sought shareholders’ nod at separate general meetings as part of the preconditions for the merger that birthed today.
A strategic corporate move, the synergy is intended to leverage and harmonise the individual strengths of 6 million metric tonnes Obu Cement (located in southern Nigeria) and 2 million tonnes CCNN (located in northern Nigeria) as a formidable player in the West African cement manufacturing market.
Gbolahan Oluwasegun, Head Corporate Finance BUA Group, speaking on the floor of the NSE this morning, said capacity would be upped by 3 million MT to 11 million MT come next year.
“This listing is meant to give our shareholders more value and to bring the consolidated business of the BUA entity to the market. So the BUA Cement is going to cover the north and the south regions of the country. So it is to give the shareholders better value for their stocks,” he asserted.
He went further to say BUA Cement is looking beyond Nigeria to explore the huge export market in the West African sub region, considering the proximity of Sokoto Cement to the Niger border.
“Sokoto Cement is positioned 100- 120 kilometres from the export market. We expect that with the combined synergy of the two new entities, we will have a lot of room to export some of our products to external West African countries as may be required,” Gbolahan said.
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