BUA acquires two cement firms, Nigeria

BUA acquires two cement firms, Nigeria
09 September 2009

One of Nigeria’s emerging and fast growing indigenous conglomerates - BUA Group, has acquired Cement Company of Northern Nigeria Plc, (CCNN) in Sokoto and Edo Cement Company Limited (ECCL), located in Okpella, Edo State.

BUA officials did not disclose details of the bid for the two companies but competent sources close to the negotiations put the cost of the acquisitions at $100 million (N15 billion).

The estimate premised on about 700 million shares acquired at CCNN, which at the market price of N10 per share for 50.7 per cent stake, which came to about N7bn, while the balance of N8bn was staked on 87 per cent shareholding on ECCL.

It was however not clear of premium was paid for the two companies’ shares.

CCNN has an installed capacity of 500,000t while ECCL can produce 350,000t of cement.

Already, BUA has unfolded plans to upgrade and modernize the production processes of ECCL, by installing a new 2Mt capacity line before the end of 2011, at a cost of US$300m (N45bn). This will bring the total yearly installed capacity to 2.35Mt.

The Chairman and Chief Executive Officer of BUA Group, Abdulsamad Rabiu, elected by the consummation of the deal, said that the acquisition has launched BUA firmly into the cement manufacturing business in the country.

"This is something we always wanted to do. And for two years, we have been struggling to get a mining licence, which is a requirement to build a cement factory.
Published under Cement News