Dangote Cement Withdraws Bid for South African Cement Firm
Dangote Cement Plc(DCP), which is the most capitalisedÂ Â company listed on the Nigerian Stock Exchange (NSE) last FridayÂ Â announced the withdrawal of its interestÂ Â Â to acquire the entire share capital of PPC Limited, South Africaâ€™s leading cement firm.
Dangote Cement had last month confirmed that it communicated itsÂ Â Â interest to acquire the entire share capital of PPC to the board of directors of the South Africaâ€™s firm.
But DCP had explained, though, that the acquisition talks wereÂ Â still at the preliminary stage and the transaction remained a potential transaction.
â€œFurther details will be published subsequently, as appropriate,â€ the company had stated last month.
However, in a notification to the NSE on Friday, DCP said its boardÂ Â of directors had on October 5,Â Â formerly notified the board of directors of PPC that it(DCP) no longerÂ Â had an interest in acquiring the entireÂ Â share capital ofÂ Â PPC.
Before now, analysts had said the acquisition of the South African firm would fit into DCPâ€™s expansion strategy and boost its future performance.
DCP had embarked on expansion of its operations to other African countries. And the Chairman of the Dangote Cement, Alhaji Aliko Dangote last May told shareholders thatÂ the Pan-African diversification programme provided theÂ Â essential foreign currency and streams of cash to operateÂ Â the company despite the challenges that characterised 2016.
According to him, the Nigerian economy fell into recession in 2016, inflation peakedÂ Â at 18.6 per cent, while resurgence in attacks on oil and gas pipelines inÂ South left Ibese and Obajana factories short of fuel.
He, however, noted that the results ofÂ Â strategic decisions taken a years agoÂ Â enabledÂ Â Dangote Cement to strengthen itsÂ Â business and consolidate itsÂ Â position in a year when many others in Nigeria and across the rest of Africa have struggled against economic downturn.
â€œOur Pan-African diversification has provided cash streams from countries such as Senegal, Cameroon and Zambia, which have provided us with essential foreign currency as foreign exchange controls made it difficult for us to obtain dollars for operations. Furthermore, we were able to borrow money in these countriesâ€™ local currencies, thus reducing our exposure to foreign currency shortages in Nigeria. In addition, we began to generate foreign currency sales from exports of cement from Nigeria to Ghana,â€ Dangote said.
Having delivered improved full-year results for 2016, Dangote Cement Plc recorded another improved performance for half year ended June 30, 2017, sending positive signals to investors to expect another bounteous harvest at the end of the year.