The Cement Company of Northern Nigeria (CCNN) is in the process of merging with its sister company, Obu Cement Company Plc, Vetiva Capital Management Limited reported Wednesday, citing a statement issued by CCNN to the Nigerian Stock Exchange.
In a note to its clients Wednesday, Vetiva quoted CCNN as saying it had received pre-requisite approvals from NSE, the Securities and Exchange Commission, the Federal Competition Consumer Protection Commission, and the Federal High Court, to carry out a scheme of merger between it and Obu.
Upon completion of the merger, all the assets and liabilities of CCNN would be assumed by Obu, making Obu the resultant entity, Vetiva said, citing CCNN.
CCNN also said it would be delisted from the Exchange and Obu would be listed in its place, according to Vetiva.
Consideration to the shareholders of CCNN will be shares of Obu in a ratio that was yet to be determined, Vetiva said.
It noted that the merger is a continuation of a consolidation exercise that saw CCNN merge with Kalambaina Cement company (another sister company), which raised its production capacity from 500k MT to 2 million MT last year.
Upon completion of this merger, Vetiva expects production capacity of the new entity to jump to 8.0 million MT.
“The merger also portends cost benefits as the new entity is poised to benefit from economies of scale,” it said.
“While we await more details of the merger, we believe this merger is positive for the company and could see BUA group further challenge the more established players in the cement market.”
CCNN’s market capitalisation currently stands at N208 billion.
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