The Nigerian Stock Exchange (NSE) will today list the shares of BUA Cement Plc, which is a product of the merger of Cement Company of Northern Nigeria Plc and Obu Cement Company. The listing is expected to boost the market capitalisation of the exchange by N1.2trillion and increase shareholder value.
CCNN and Obu Cement Company are both members of BUA Group founded by Alhaji Abdulsamad Rabiu. The merger involved the transfer of all CCNN’s assets, liabilities and undertakings including employees, real properties and intellectual property rights to Obu Cement. In consideration for the transfer, CCNN shareholders will receive shares in Obu Cement and the company will be dissolved without being wound up.
Explaining the benefits of the merger, Rabiu said it will increase the production capacity of the enlarged company to 8.0 million metric tonnes per annum (mtpa).
“It is anticipated that in addition to meeting the demand from 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.
According to him, the merger would provide opportunities for significant cost savings and improved operational efficiencies by streamlining operations and optimising the use of combined resources.
On economies of scale, Rabiu said: “The merger will provide a platform where the enlarged company benefits from economies of scale in procurement, distribution and manufacturing of the products offered to our customers. We expect the benefits accruing from greater economies of scale to accrue to many stakeholders.”
He added that CCNN shareholders will become shareholders of a larger and highly profitable entity, stressing that synergies created as a result of the merger would create additional value for shareholders.