Dangote Cement may be in for a bidding war as Canada’s Fairfax Africa investments has signaled its intentions to raise its bid offer for South Africa’s PPC Cement. PPC had rejected an earlier bid of $738 million from Fairfax, calling it low.

Dangote Cement, on Friday confirmed its interest in the deal after it issued a press release on the website of the Nigerian Stock Exchange. This move could likely put Dangote Cement on a path to a bidding war with other cement rivals, who may be interested in acquiring PPC.

Why PPC Cement is key for Dangote

Taking over the firm will give the acquiring company a foothold, not just in South Africa but in the larger southern region as a whole. Dangote Cement currently has presence in East & Southern Africa with presence in Tanzania, Zambia, Ethiopia and South Africa.`



Dangote Cement South Africa recorded a significant increase in revenues in 2016 psoting a revenue growth of 16% to N41.3 billion compared to N35.3 billion in 2015. The South African subsidiary also turned a profit in 2016 posting N2.1 billion profit compared to N483 million loss in 2015. Dangote Cement owns 64% of the local entity.

Dangote Cement is currently the largest cement producer in Africa with a production capacity of almost 46 million tonnes. PPC has a production capacity of 7 million tonnes per annum. PPC latest result reveal the company reported revenues of about 9.1 billion rands or N254 billion, gross profit came in at R2.282 billion, operating profit was recorded at R1.027 billion (N32 million), while profit for the year attributable to shareholders of PPC was R93 million. Furthermore, headline earnings per share was 7 cents per share.



READ MORE: https://nairametrics.com/dangote-cement-may-be-in-a-bidding-war-have-gotten-into-for-ppc-cement-of-south-africa/


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