Dangote Cement still interested in South Africa’s PPC: CEO
By Chijioke Ohuocha
LAGOS (Reuters) – Dangote Cement is still interested in acquiring South African rival PPC and would do a deal at the right price, its outgoing chief executive officer Onne van der Weijde said on Thursday.
Weijde said PPC was a “good fit” for Dangote Cement, which is majority owned by Africa’s richest man, Aliko Dangote.
“We are still very much interested at the right price. We think it’s a good fit and we certainly would like to do a deal,” Weijde told an analysts call discussing its nine months earnings.
Dangote Cement made an approach to PPC last month, but later withdrew, saying it did not want to get into a lengthy process with an uncertain outcome, Weijde told the call, adding that the Nigerian company made an offer.
PPC is already the subject of an all-share merger bid by local rival AfriSam that values it at $700 million.
Earlier Dangote Cement announced that Weijde would step down at the end of the year as chief executive but remain on the board as a non-executive director.
Dangote Cement has invested $6.5 billion to develop cement plants across Africa.
Weijde said Africa required lots of cement plants to meet demand and that Dangote Cement was open to acquisitions or would grow organically as it had the know-how to develop new plants.
Shares in Dangote Cement, which have gained 26 percent this year, closed unchanged on Thursday at 219 naira.
On the call, chief finance officer Brian Egan said that Dangote Cement was considering a eurobond or local debt issue and that a decision would be made at the end of the year.
Egan said the company was leaning towards a eurobond with yields falling and the naira stabilising. He added that 70 percent of the company’s 389 billion naira debt was owed to Dangote Industries Limited, and it wanted to move away from that.
Weidje said Moodys had assigned a Ba3 local currency rating to Dangote Cement in preparation for the bond issue.
On Thursday Dangote Cement said pretax profit grew 48.1 percent to 220.18 billion naira for the nine-months to September.
(Additional reporting by Alexis Akwagyiram; Editing by Mark Potter and Elaine Hardcastle)
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