The Senate has clarified that the proposed $1 billion acquisition of Lafarge Africa Plc by Hainan Huaxin Pan-African Investment Company Plc, a Chinese company will not affect the 16.19 per cent equity held by Nigerian investors.
Following the clarification, the Senate endorsed and approved the transaction adopting the report of its ad hoc committee chaired by Abba Moro, senate minority leader.
The committee was constituted seven months ago to investigate the proposed sale by Holcim AG, the Swiss building materials company, following concerns about Lafarge Africa’s ownership structure and the implications of the deal.
Presenting the report, Moro said the committee engaged relevant stakeholders and found no legal impediment to the acquisition.
He recommended that the senate allow the transaction to proceed, subject to strict compliance with Nigerian laws and continued regulatory oversight.
“The senate allowed the transaction process concerning the sale of Lafarge Cement Company Plc to Huaxin to scale through,” he said.
“However, all due processes and strict compliance with all Nigerian extant laws on the subject must be followed and adhered to strictly for a hitch-free transaction and transition process.”
The committee also urged regulatory agencies, including the Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC), Federal Competition and Consumer Protection Commission (FCCPC), Nigerian Investment Promotion Commission (NIPC) and Bureau of Public Enterprises (BPE), to maintain rigorous oversight of the transaction.
The committee further recommended that the new investors strengthen their corporate social responsibility (CSR) programmes in host communities.
According to the report, public concerns over the transaction stemmed largely from the misconception that Lafarge Africa is wholly Nigerian-owned.
The committee said the proposed acquisition represents the transfer of ownership from one foreign investor to another because Holcim, the company’s majority shareholder, is divesting its stake to another foreign investor.
It added that the transaction would not diminish or alter the rights of Nigerian shareholders, whose 16.19 per cent equity stake in the company would remain intact.
The committee also said relevant regulatory agencies found no evidence that the acquisition breached Nigeria’s legal or regulatory framework or posed any immediate threat to national security.
The committee added that Huaxin had committed to injecting fresh capital into Lafarge’s operations in Nigeria and across Africa, a move expected to strengthen the company’s operations, stimulate industrial growth and support foreign direct investment.
The report further noted that Lafarge controls about 18 per cent of Nigeria’s cement market and that the acquisition would not significantly alter competition in the industry.
It said the FCCPC had received assurances from the acquiring company that there would be no staff retrenchment during the transition.
