One of the Chinese cement producers is all set to take complete ownership of AfriSam, which is one of the major suppliers of cement as well as construction materials in Southern Africa, and post a merger filing with the Competition and Consumer Authority – CCA.
The proposed deal of complete ownership of AfriSam is going to see West International New Building Materials Pte. Ltd., which is a Singapore-based firm, getting owned by West China Cement Limited – WCC, which is Hong Kong-listed and acquire 100% of AfriSam Holdings, including the subsidiaries like AfriSam Botswana.
WCC, which is a global cement manufacturer with operations spread across mainland China, Mozambique, the DRC, and Ethiopia, as well as Uzbekistan, has no physical footprint or even direct cement supply in Botswana. The acquisition is going to give the company quite a prominent new entry point into the Southern African market.
AfriSam, which is headquartered in South Africa, goes on to supply cement and concrete as well as aggregate products throughout the region, functioning in South Africa, Eswatini, Namibia, and Lesotho. AfriSam Botswana at present goes on to import 50 kg cement bags from South Africa in order to supply the local construction sector.
The takeover bid goes on to land at quite a sensitive time for the construction sector of the region, wherein cement supply and pricing pressures, along with competition, go on to remain central concerns in the middle of ongoing government infrastructure investments. Due to this, the proposed acquisition is likely to go through some strict review.
The CCA went on to confirm that it is evaluating the merger in order to gauge its effect on pricing competition and market concentration as well as consumer welfare. The Authority has also gone ahead and called on the public along with interested stakeholders to submit the comments or information as part of the regulatory process.
As per Moneyweb, the largest asset manager in Africa, the Public Investment Corporation – PIC along with major South African lenders such as the likes of Nedbank, Standard Bank, FirstRand, and Absa, goes on to hold a significant stake in AfriSam post many restructuring deals. These institutions have reportedly been looking to decrease or even exit their positions within the company.
The final ruling by the authority is going to determine if the merger is approved in an unconditional way, approved along with conditions, or blocked completely.