Information that Huaxin Cement, a cement company with its headquarters in China, will become the new majority shareholder of Lafarge Africa Plc raised the share price of the company at the Nigerian Exchange (NGX) Limited on Monday.
According to reports, Huaxin Cement is acquiring an 83.81 per cent stake in Lafarge Africa held by the popular Swiss multinational firm, Holcim Group for an amount speculated to be $1 billion.
It was gathered that Holcim is planning to exit Nigeria amid a tough macroeconomic environment made worse by high inflation, energy and the devaluation of the Naira.
The news of the takeover triggered demand for Lafarge Africa stocks at the market yesterday, resulting in its value rising by 10.00 per cent, the highest jump a stock can make on the NGX in a trading session.
Business Post reports that the price of the cement maker closed on Monday at N63.80 per unit versus last Friday’s closing price of N58.00 per unit.
It was observed that yesterday, investors bought and sold 21.3 million units of Lafarge Africa equities valued at N1.4 billion in 187 deals.
It is believed that this trend will continue today as more investors mop up the shares at the bourse for a chance to be part of the growth prospect of the organisation under new management.
Analysts project that the acquisition of Lafarge Africa by Huaxin Cement will likely stir fresh competition in the Nigerian cement landscape, currently controlled by Dangote Cement.
This is because of the growing influence of Chinese construction firms in Nigeria. It is speculated that they will most likely patronise Lafarge Africa, which will, in turn, improve the top and bottom lines of the company and lead to higher returns for shareholders.