BUA Cement, on Thursday, listed on the Nigerian Stock Exchange (NSE) with a market capitalization of N1.2 trillion ($3.3 billion) as a result of the merger between BUA Cement, Cement Company of Northern Nigeria (CCNN) and Obu Cement company.
Engr. Yusuf Binji, the managing director of the merged companies, said the merger provided avenues for the companies to solidify their market presence and create a strong bond that will yield value and profit for shareholders. He added that it further strengthens their competitive position in the market and provides opportunity for them to plan and create advance strategies to enhance operations and administrative efficiencies that will spur further growth for the companies.
And the companies are poised to explore new ways to augment its value and market presence.
“BUA Cement is poised to add even more value to the Nigerian economy as a whole through this listing. Over the past few years, we have significantly ramped up capacity and currently boast of the most efficient and integrated operations in the Nigerian Cement Industry. This new publicly listed company will continue to deliver exceptional value to all stakeholders in the foreseeable future,” he said.
He added that the company will incorporate shares from the defunct CCNN and Obu Cement to solidify their market shares.
“We are bringing in about 13 billion shares from the defunct CCNN and 20 billion from Obu Cement and this gives us a total share capacity of about 33 billion shares with a total market capitalization of N1.8 trillion.
“We are coming into the market at the beginning of the year, and since trading has commenced, we expect to see a lot of value added for the shareholders during the course of the year,” he added.
Talking about the production capacity of the company, Mr. Banji said the total installed capacity is eight million metric tonnes per annum. And the companies’ decision to merge is to create a single entity that will leverage on the synergies to generate more profit for shareholders.
“The essence of the merger is to be able to tap into the potentials and unlock the opportunities that are within the two companies in terms of market size, dealership base, profitability and staff skills. There will be a lot of positives as we go along the way,” he said.
This listing has made BUA the third most capitalized stock on the Nigerian Stock Exchange, with 33.86 billion ordinary shares at N35 per share.
The News Agency of Nigeria (NAN) reported that BUA’s listing on Thursday added N1.18 trillion to the NSE market capitalization.
The CEO of NSE, Oscar Onyema, applauded the founder and Chairman of BUA, Abdul Samad Rabiu, for listing the company in the Nigerian Stock Exchange. He said the move demonstrates confidence in the value that NSE offers.
In June 2018, CCNN announced that it has approached the Nigerian Stock Exchange about its intention to merge with BUA. The company was the owner of Kalambaina Cement plant in Sokoto, producing 1.5 million tonnes of cement per annum. On the 6th of January, the company announced that it has received the approval for the merger from the Nigerian Securities and Exchange Commission, as well as the requisite sanction of the Federal High Court of Nigeria.
The deal made Mr. Rabiu $650 million richer and created the second largest cement company on the Nigerian bourse after Dangote Cement.
The process involved transferring all CCNN’s assets, liabilities and undertakings, which includes employees, real properties and intellectual property rights to Obu Cement. In turn, CCNN shareholders will receive shares in Obu Cement and the company will be dissolved without being wound up.
Mr. Rabiu said the merger will enable a wider geographical reach of BUA’s products and increase in production as a result.
“It is anticipated that in addition to meeting the demand of our customers in our core regions in the country, the enlarged company would be positioned to distribute its products in new geographical markets, creating the potential for additional shareholder value creation,” he said.