AHL Research Ltd has highlighted that Maple Leaf Cement Factory (MLCF) and Pioneer Cement Ltd (PIOC) have announced a proposed amalgamation through a share-swap arrangement, disclosed at the Pakistan Stock Exchange (PSX).

Under the scheme, PIOC shareholders will receive 2.65 MLCF shares for every 1 PIOC share. MLCF already owns 77.38 per cent of PIOC (around 175.8m shares), while minority shareholders hold 22.62 per cent (51.4m shares). To complete the transaction, MLCF will issue about 136.17m  new ordinary shares to eligible PIOC shareholders.

The merger, effective 1 July 2026, is subject to shareholder, regulatory, and Lahore High Court approvals. Once finalised, PIOC’s operations will be consolidated into MLCF, boosting MLCF’s total cement production capacity to 13.13Mt. This will give MLCF a 15 per cent market share, positioning it as the third-largest cement producer in Pakistan.

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The proposed exchange ratio implies a PIOC valuation of US$42.35 per tonne EV. Based on FY27E earnings per share (EPS) of PKR?14.4 (US$0.052) and a post-transaction share count of 1.184bn, the new issuance is expected to dilute EPS by only 0.6 per cent, despite adding 136m shares.

This development marks a significant consolidation move in Pakistan’s cement sector, strengthening MLCF’s scale and competitive standing while minimising shareholder dilution.

By Abdul Rab Siddiqi, Pakistan