Enlarged CAP set to become largest player in Nigeria’s paints market

The merger between Chemical and Allied Products Plc (CAP) and Portland Paints and Products Nigeria Plc will make the enlarged CAP become the largest player in the Nigerian paints market by market share, said David Wright, Managing Director, Chemical and Allied Paints Plc.

He told the audience during the companies ‘Facts Behind the Merger’ presentation on Tuesday at the Nigerian Stock Exchange (NSE) that currently, CAP and Portland Paints rank Number 2 and Number 4 in the Nigerian paints market.

The Facts Behind the Merger and Digital Closing Gong Ceremony for CAP Plc and Portland Paints Plc was a platform created by the Nigerian Stock Exchange to provide stockbrokers, investors, analysts, funds manager and capital market correspondents with market information about companies listed on The NSE.

In the Scheme of Merger between CAP and Portland Paints, CAP will be the surviving entity and Portland Paints will be dissolved without being wound up, in accordance with applicable laws. Portland Paints will be delisted from the Main Board of the NSE and the registration of the ordinary shares of Portland Paints with the Securities and Exchange Commission (SEC) will be withdrawn.

Read Also: Chemical and Allied Products set for merger with Portland Paints

Portland Paints’ shareholders will be able to elect to either receive: a cash consideration of N2.90 for every share held in Portland Paints; or a share consideration of 1 share in CAP for every 8 shares held in Portland Paints. The cash consideration represents a 41percent premium to the last traded share price of Portland Paints on October 23, 2020, being the last business day prior to the date of announcement.

“Approval-in-Principle” for the merger has been obtained from the Securities and Exchange Commission (SEC) and “No Objection” has also been obtained from the Federal Competition and Consumer Protection Commission, and Federal Inland Revenue Service.

Subject to approvals from shareholders of both companies at a Court Ordered Meetings on February 18, 2021, as well as final regulatory approvals and court sanction, the merger is expected to close by first-quarter (Q1) of 2021.

CAP Plc and Portland Paints Plc leveraged the platform to make a presentation on the merger of both companies to capital market stakeholders and they were honoured with NSE digital Closing Gong Ceremony.

Chemical and Allied Paints Plc is a leading paints and coatings company in Nigeria and a public company listed on The Nigerian Stock Exchange. The company is the sole technological licensee of Akzo Nobel Coatings International B.V. in Nigeria and a subsidiary of UAC of Nigeria Plc, which holds 51.49percent of the company’s shares. CAP plays within the premium and standard segments of the Paints and Coatings market, with flagship brands such as Dulux positioned in the premium segment and Caplux in the standard segment respectively. The company pioneered the colour centre concept in Nigeria in 2005, which contributed to the evolution of the Nigerian paint industry. Today, CAP has 76 colour centres and colour shops across 31 states in Nigeria. The company generated revenues of N8.41 billion in 2019.

Portland Paints & Products Nigeria Plc is a leading diversified paint and protective coatings company in Nigeria and a public company listed on The Exchange. The company is a subsidiary of UAC of Nigeria Plc which holds 85.98percent of the company’s issued shares. Portland Paints holds a 35-year track record of manufacturing and selling decorative, industrial and marine/protective coatings for the construction and oil & gas industries in Nigeria. Its flagship brand, Sandtex, is renowned for its exceptional quality for residential, commercial and industrial buildings. Portland Paints is the Nigerian representative of Hempel, a leading global marine and protective coatings brand. The company generated revenue of N2.61 billion in 2019 and currently has 15 Sandtex Experience Centres across 9 states in Nigeria.