SUN DEC 01 2024-theGBJournal|Holcim, Swiss cement maker, said today it has signed an agreement with China-based Huaxin Cement Ltd to sell its entire 83.81% shareholding in its Nigerian operation, Lafarge Africa PLC, at an equity value of US$ 1 billion on a 100% basis.
Holcim said in a statement that the transaction is expected to close in 2025, subject to customary and regulatory approvals.
Holcim joins the growing army of international firms exiting the country, and the decision highlights the significant challenges in doing business in Nigeria.
The exit also align with broader trends, as other global companies, including pharmaceutical and energy firms, have also high-tailed out of Nigeria.
But more importantly, according to a theG&BJournal analyst, ”it reflects Holcim’s intent to relocate resources to regions and sectors offering better financial prospects.”
In October Holcim reported a recurring operating profit of 1.6 billion Swiss francs ($1.90 billion) for the third quarter, and announced a share buyback program of up to CHF 1 billion on 18 March 2024, which is on course to be completed by year-end.
The company has been focused and investing this year on sustainable growth, making six value-accretive acquisitions during the quarter, as it has been strategically shifting focus towards developed markets and higher-return business segments like aggregates, ready mix concrete, and asphalt, which provides more stable growth opportunities.
In the U.S., Holcim signed an agreement to acquire OX Engineered Products, a leading U.S. provider of advanced insulation systems that complements its range of building envelope solutions.
The acquisition continues the expansion of Holcim’s Solutions & Products business into the most attractive construction segments, from roofing and insulation to repair and refurbishment.
Lafarge Africa Plc is traded on the NGX Exchange. Its share closed Friday at N58 per share. It is, as at the close of trading on Friday, the 15th most valuable stock on the NGX with market capitalization of N934 billion or 1.58% of the equity market.
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