Lawmakers approve $1bn Lafarge sale to Chinese firm, retain 19.19% Nigerian equity

THE Senate has given its approval to the proposed $1 billion acquisition of Lafarge Africa Plc by China’s Hainan Huaxin Pan-African Investment Company Plc, affirming that the transaction will not affect the 16.19 percent equity held by Nigerian investors.

The approval followed the adoption of the report of the Senate ad hoc committee that investigated the planned divestment by Holcim AG, the Swiss cement giant and majority shareholder in Lafarge Africa. The report was presented on Thursday by the committee’s chairman and Senate Minority Leader, Mr Abba Moro.

The committee, which was established 7 months ago after lawmakers raised concerns over the ownership structure of Lafarge Africa and the implications of the proposed transaction, said its investigation uncovered no legal obstacle preventing the sale.

Moro said the committee consulted key stakeholders and recommended that the acquisition proceed, provided the parties comply fully with Nigerian laws and regulatory requirements.

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“The Senate allowed the transaction process concerning the sale of Lafarge Cement Company Plc to Huaxin to scale through,” Moro said. “However, all due processes and strict compliance with all Nigerian extant laws on the subject must be followed and adhered to strictly for a hitch-free transaction and transition process.”

The committee also urged regulators, including the Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC), Federal Competition and Consumer Protection Commission (FCCPC), Nigerian Investment Promotion Commission (NIPC) and Bureau of Public Enterprises (BPE), to closely supervise the transaction to ensure full compliance throughout the process.

It further advised the incoming investors to expand their corporate social responsibility initiatives in communities where Lafarge operates.

According to the report, much of the public concern surrounding the deal arose from the mistaken belief that Lafarge Africa is a wholly Nigerian-owned company. The committee explained that the proposed transaction merely represents the transfer of ownership from one foreign investor to another, with Holcim divesting its stake to Huaxin.

Lawmakers were informed that the rights and interests of Nigerian shareholders would remain unchanged, as the 16.19 percent stake owned by local investors would not be diluted or altered by the transaction.

The committee added that regulatory agencies found no evidence suggesting the acquisition violates Nigerian laws or regulations or poses any immediate national security risk.

It also disclosed that Huaxin has pledged to inject fresh capital into Lafarge’s Nigerian and African operations, a commitment expected to strengthen production capacity, promote industrial development and attract additional foreign direct investment (FDI).

On market competition, the report noted that Lafarge accounts for roughly 18 percent of Nigeria’s cement industry and that the acquisition is not expected to significantly alter the competitive landscape. It also said the FCCPC had received assurances from Huaxin that no employees would be laid off during the transition.

During deliberations, Senator Abdul Ningi of Bauchi Central questioned the ownership structure outlined in the committee’s report.

He argued that while the report identified Nigerian interests as holding about 16 percent of Lafarge Africa and attributed 18 percent to Holcim, it did not explain who owns the remaining 66 percent of the company’s shares.

“I would have imagined that the report of the committee should specifically give us the shareholding structure,” Ningi said.

“Nigerians have about 16 percent, Lafarge has 18 percent. Who owns the remaining 66 per cent? We need to understand where we are coming from.

“It is only when we know who owns the remaining shares that we can determine whether Nigerians are actually benefiting from this transaction.”

Ningi maintained that the deal was not the sale of a strategic Nigerian asset but simply a transfer of ownership between two foreign companies. He also urged the committee to clearly identify the legal provisions permitting such a transfer before seeking Senate approval.

Other lawmakers, including Chairman of the Senate Committee on Capital Market, Osita Izunaso, and Senator Shuaib Salisu of Ogun Central, supported the committee’s findings and recommendations.

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The Senate subsequently adopted the report, formally giving legislative backing to the proposed acquisition.

The approval follows months of legislative scrutiny after the Senate Committee on Capital Market launched an investigation into Holcim Group’s decision to divest its 83.81 percent controlling stake in Lafarge Africa.

During the hearings, the SEC informed lawmakers that it had not received any formal application relating to the sale, explaining that it had only been notified of an internal restructuring within Holcim. The BPE also clarified that the shares being sold belong to Holcim and that the transaction would not affect the 16.19 percent equity held by Nigerian investors.

Following those submissions, lawmakers summoned Lafarge Africa’s management and requested additional information from the CAC before concluding their review of the proposed transaction.