CCNN, BUA’s Kalambaina Cement Company set to merge
The Board of Directors of Cement Company of Northern Nigeria said it had informed the Nigerian Stock Exchange of its proposed merger with the BUA-owned Kalambaina Cement Company Limited.
According to the board, this was disclosed in filings to regulatory authorities and is subject to various approvals.
If approved, the combined entity will have a total installed capacity of two million metric tonnes per annum, it said.
A statement from BUA quoted the Managing Director, CCNN, Ibrahim Aminu, as saying that the proposed merger would position the CCNN for better competitiveness within its home market and also enable it to utilise the more modern plant and equipment of the Kalambaina Cement Company to boost its market penetration and export potential.
The statement read in part, “Over the years, we have always delivered exceptional value to all stakeholders and this proposed merger is in continuation of that. We have consistently outperformed the industry in key metrics such as capacity utilisation but growth has been hampered over the years due to limited expansion and lack of alternative fuel sources.
“Kalambaina Cement’s 1.5 million metric tonnes per annum multi-fuel (coal, heavy oils and gas)-powered cement plant solves that issue with limited downtime and further opportunities for growth and expansion.”
The CCNN stated that the proposed merger would provide a compelling opportunity to capture significant synergies and create value for the benefit of the shareholders of both companies in the form of stronger competitive position of the enlarged company, economies of scale, enhanced operations and administrative efficiencies.
“This is in view of various challenges that had prevented the CCNN from maximising the opportunities present in its local markets where it is hampered by limited access and high cost of heavy fuels, which CCNN’s Sokoto cement factory operates on.”
It added that the shares of the CCNN would be issued and allotted to all shareholders of Kalambaina Cement in exchange for their shares in Kalambaina Cement at an agreed ratio based on the CCNN’s 30-day volume weighted average closing price to June 22, 2018 of ₦25.99 per share.
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