Huaxin values Lafarge Africa as high as $1.6 billion

Huaxin Cement Company, the prospective buyer of Holcim’s stake in Lafarge Africa, has valued 100 percent of Lafarge Africa’s shareholding as high as $1.6 billion.

The group, set to pay $838.8 million to Holcim for its 83.8 percent stake in Lafarge Africa, estimated the enterprise value of Lafarge Africa as between $1.06 billion and $1.59 billion. This valuation was disclosed in the company’s filing on the Hong Kong Stock Exchange.

The valuation assumes cement prices in Nigeria range between $100 and $150 per ton, based on Lafarge Africa’s annual production capacity of 10.6 million tonnes. Additionally, the company estimated the replacement value of Lafarge Africa’s assets at $1.2 billion to $1.4 billion.

Huaxin used an alternative valuation approach by multiplying Lafarge Africa’s 2023 EBITDA of $151 million by a factor of 7, resulting in an enterprise value of $1.057 billion.

According to the disclosure, the acquisition of Lafarge Africa aligns with Huaxin’s overseas expansion strategy, which focuses on leveraging its expertise in industrial technology and production chain integration to drive growth. This strategy also helps the company counteract the effects of China’s domestic market slowdown.

Huaxin’s entry into Nigeria’s cement sector marks a significant shift in market dynamics, which has historically been dominated by Indian cement makers. This move marks the first major Chinese cement company venture into the Nigerian market, potentially introducing new technologies, production methods, and pricing strategies.

If the deal is finalized by August 31, 2025, with the NAFEM exchange rate at ₦1,700/$, a $1.1 billion valuation would place Lafarge Africa’s market capitalization at approximately ₦1.87 trillion.

Since the deal was announced on December 1, Lafarge Africa’s share price has surged by 21%, reaching a high of N70.15 on December 3.