Shareholders of Benue Cement Plc (BCC) on Tuesday endorsed the proposed merger with Dangote Cement Plc (DCP) to form a larger cement entity that would yield many benefits to them.
Addressing the shareholders at the Court-ordered Meeting held in Kano, on Tuesday, Chairman of BCC, Alhaji Aliko Dangote, said that the merger when consummated, will facilitate better access to financing, adding that the post-merger entity would have a bigger balance sheet and a larger collection of high quality assets that can potentially be pledged as collateral to lenders.
According to him, by joining DCP, BCC shareholders would have the opportunity of becoming part owners of DCP assets spread across the country and enjoy tax holiday that the company is having currently. “The proposed merger is conceived with the goal of consolidating the cement producing entities of Dangote Industries Limited in Nigeria under a single entity presenting a robust platform for the enlarged DCP to optimise on available growth opportunities having regard to the present state of the Nigerian cement industry. This is expected to significantly increase production capacity, boost turnover and profitability and eventually lead to an enhanced dividend payout and capital appreciation for the investors,” he said.
In the same vein, Managing Director of BCC, Mr. Shree Junnarkar, told the shareholders that the merger will increase value generation through the streamlining of the management, operations and processes of both companies, thereby leveraging positive economies of scale in purchasing and manufacturing, and unifying the companies, distribution and sales strategies.
“The directors of DCP and BCC are of the opinion that significant cost – revenue synergies will accrue from the merge to create additional value to the shareholders of both companies,” he said.