Ras Al Khaimah Cement seen as attractive take-over target, UAE

Ras Al Khaimah Cement seen as attractive take-over target, UAE
Published: 06 April 2011

Ras Al Khaimah Cement Company, a mid-cap building materials producer from the northern emirate, has crept back into the spotlight as a potential takeover target, reports The National.

Although demand for cement is still muted, analysts say mergers and acquisitions (M&A) in the sector are likely because of the attractive pricing of some producers amid the property industry malaise.

"There are reasons why transnational cement companies may explore the possibility of acquiring assets in the UAE," said Ankur Agarwal, analyst at Nomura in Dubai, pointing to RAK Cement as a credible candidate.

Mr Agarwal has a "buy" recommendation on RAK Cement, and a target price of Dh1.35.

"We see continued M&A interest in cement assets in the region that could be a catalyst for the cement stocks in the UAE," he said.

Last year, India’s UltraTech Cement completed the acquisition of ETA Star of the UAE and this year, Oman’s Raysut Cement purchased the UAE company Pioneer Cement for US$172m.

He said Ras Al Khaimah’s proximity to the Oman border could boost the area’s cement exports to regions experiencing shortages - including sub-Saharan Africa – with attractive returns.