LAGOS (Reuters) - Nigeria's biggest cement maker Dangote Cement will list on the stock exchange on November 5 after a planned merger with Benue Cement, creating the country's largest company by market capitalisation ahead of an anticipated building boom.

The deal values the newly-formed Dangote Cement Plc at around $14 billion through the listing of 15.5 billion shares at a price of 135 naira. Benue Cement shareholders will receive one share for every two Benue shares held, according to a statement from the stock exchange.

Merger documents seen by Reuters said shares in Benue Cement, which were already trading at the pre-merger price of 67.50 naira on Tuesday, would be suspended on October 22 before trading in Dangote Cement shares begins on November 5.

The newly listed company, owned by billionaire tycoon Aliko Dangote, will account for more than a third of the total capitalisation of the Nigerian Stock Exchange, which currently stands at 5.94 trillion.

Dangote, one of only two Nigerians on the Forbes billionaires list, already owns 75 percent of Benue and the stake of his Dangote Group in the new entity will rise to 95.9 percent after the deal.

The free float of the new entity will be 4.1 percent. The merger stills needs final approval from shareholders in both companies and from the Securities and Exchange Commission (SEC).

"The primary objective of the merger is to streamline the management and governance of both companies," Dangote said in a letter to shareholders in the two firms, adding that all the necessary pre-merger approvals had been received.

He said the scale of the new entity would allow it better access to financing, as well as consolidating supply and distribution chains, reducing costs and helping increase cement production more quickly.

Nigeria's cement industry is gearing up for a sharp increase in output in the coming years as government and private sector infrastructure spending rises.

The Cement Manufacturers' Association of Nigeria expects production to rise to 20 million metric tonnes by 2012, almost double the level expected this year and a figure which could turn the country from a net importer to an exporter.

Demand from the rest of Africa is also expected to rise and Dangote has said he wants to position the company to be able to meet that need.

"Growth is expected to be very rapid if the government commences work towards its Vision 2020 programme for housing and transportation, which according to industry estimates would consume about 919 million metric tonnes of cement over the next ten years," Dangote said in the letter.

The Dangote Group, one of Nigeria's largest conglomerates, already controls more than half of the local cement market with its wholly owned Obajana and Ibese plants, the controlling stake in Benue Cement, its role as a joint venture partner in Unicem Cement and four import terminals.

The merger documents estimated earnings per share of the new entity would reach 16.98 naira in 2011, compared with standalone earnings per share this year of 5.26 naira for Benue and 7.85 naira for Dangote Cement.

It also expected to pay a dividend of 11.99 naira per share for 2011 if the merger goes ahead.

http://af.reuters.com/article/investingNews/idAFJOE6870DM20100908?pageNumber=2&virtualBrandChannel=0&sp=true

Nigeria Approves $14 Billion Dangote Cement Listing, to Add 37% to Market
By Vincent Nwanma - Sep 8, 2010

Nigeria’s stock exchange approved a 22.09 trillion-naira ($14 billion) listing of Dangote Cement, the nation’s biggest producer of the building material, which will increase the bourse’s market capitalization by 37 percent.

The company will be created out of the merger of Dangote Cement and Benue Cement Co., the Lagos-based bourse said in an e-mailed statement today. A total of 15.5 billion shares for the will be listed at 135 naira each, the exchange said, without giving further details. Afrinvest (West Africa) Ltd. will introduce the issue, according to the statement.

The Nigerian bourse, sub-Saharan Africa’s second-biggest after South Africa’s, currently has a market value of $37.2 billion. Dangote is owned by Nigerian billionaire Aliko Dangote, whose Dangote Group has interests Dangote Sugar Refinery Plc, National Salt Co. Nigeria Plc, logistics and real estate.

“It is a very important development because it will boost confidence in the market,” Bismarck Rewane, chief executive officer of Lagos-based Financial Derivatives Co., said by phone from London today. “The listing is another opportunity for investors to participate in a company that has become the leading producer of cement in Africa.”

Dangote Cement has projects and operations in Nigeria, Benin, Senegal, Zambia and Ghana.

Shareholders of Dangote Cement and Benue, in which Dangote has a stake, will meet on Sept. 28 to pass resolutions on the proposed merger, the two companies said in statements published in ThisDay newspaper yesterday.

http://www.bloomberg.com/news/print/2010-09-08/nigeria-stock-exchange-approves-merger-of-dangote-cement-and-benue-cement.html

This guy is just growing his companies in a big way!!!

KAI! so much money ewww!

I just like this Dangote guy. He is typical example of why government should leave business to business people.

You hardly hear of divisions along ethnic lines when it comes to business. The division is all about business interests which is healthy for a divided country of ours. Mr. Dangote hires people from all parts of Nigeria and even abroad as long as you are capable. Government can not do this, everywhere has be balanced or else there will be trouble.

Athough, when designing the country along business lines, care must be taken in maintaining a fine balance between the geopolitical zones.

Gud news! Enterpreneurship @ its peak. I admire his biz sense.

Really!!!, That's good to hear. But why laying and paying off all his staffs in Port Harcourt leaving only the MD?? Is that part of the deal?

Akanbi_edu:

I just like this Dangote guy. He is typical example of why government should leave business to business people.

You hardly hear of divisions along ethnic lines when it comes to business. The division is all about business interests which is healthy for a divided country of ours. Mr. Dangote hires people from all parts of Nigeria and even abroad as long as you are capable. Government can not do this, everywhere has be balanced or else there will be trouble.

Athough, when designing the country along business lines, care must be taken in maintaining a fine balance between the geopolitical zones.

Can you explain this?

I wonder when GLO and co will get listed?

$14Billion?

How did they arrive at this number, and what companies will be under Dangote Cement?


The only reason I am asking is because Lafarge the largest building material manufacturer has a market cap of 11.2 billion pounds.

cement business na big business oh, I need to start thinking along this path,

wow, , uncle dangote, will definately improve in rankings on forbes, my uncle, chei, my uncle.

Nigeria’s stock exchange approved a 22.09 trillion-naira ($14 billion) listing of Dangote Cement, the nation’s biggest producer of the building material, which will increase the bourse’s market capitalization by 37 percent.


I really dont know if our reporters have a basic skill in arithmetic, otherwise they should know that $14b is 2.2 trillion Naira and not 22.09 t.
there is a very big difference btw both figures.  Anyway nice to know that dangote is now the undeniably richest nigerian. me I will buy the shares sha, at least for the dividend sake

:owow [img]http://2.s07.flagcounter.com/count/DymW/bg=ffffff/txt=ffffff/border=ffffff/columns=1/maxflags=1/viewers=3/labels=0/[/img]
[img]http://s07.flagcounter.com/count/DymW/bg=ffffff/txt=ffffff/border=ffffff/columns=1/maxflags=1/viewers=3/labels=0/[/img][img]http://s04.flagcounter.com/count/ZbQh/bg=FFFFFF/txt=FFFFFF/border=F7F7F7/columns=1/maxflags=1/viewers=3/labels=0/[/img]

cement business na big business oh, I need to start thinking along this path,

wow, , uncle dangote, will definately improve in rankings on forbes, my uncle, chei, my uncle.

oluwabamis:

Nigeria’s stock exchange approved a 22.09 trillion-naira ($14 billion) listing of Dangote Cement, the nation’s biggest producer of the building material, which will increase the bourse’s market capitalization by 37 percent.


I really dont know if our reporters have a basic skill in arithmetic, otherwise they should know that $14b is 2.2 trillion Naira and not 22.09 t.
there is a very big difference btw both figures.  Anyway nice to know that dangote is now the undeniably richest nigerian. me I will buy the shares sha, at least for the dividend sake

[flash=200,200]http://[img][/img][/flash]

BUHAHAHAHAHAHAHAHAHA, And no one but you spotted it. Every other person just swallowed the news like GARRI

i dont like this guy

I am not too sure exactly where this expected building boom is going to come from. This is an oil not a construction driven economy so spending in that area is by free will. The government we earnestly expect should take the lead in this infrastructure desert called Nigeria but rather unfortunately foreign reserve remains a myth and excess crude is spent on more pressing matters. Hard earned and hardworking private sector money is currently in real estate (with the collapse of ALL financial instruments from bonds to stocks) so we are in a supposed construction boom. Where is another boom coming from?

With some much cash coming in I would now expected Dangote to help drive the market by looking at the price structure of his product. We have been promised a downward review for very long.  Let the private sector now create a private markets.

naijatoday:

$14Billion?

How did they arrive at this number, and what companies will be under Dangote Cement?


The only reason I am asking is because Lafarge the largest building material manufacturer has a market cap of 11.2 billion pounds.

I know right - really interested to understand this valuation as well. We will see the docs and hear more from research analysts

B4 U guys start praising him, have you guys noticed the Nigeria govt gave previlages to one person to import unbagged cement to Nigeria? and also the importation of things like suger and salt to just a few?ie our very Dangote?

2 things here, we should not over praise this dude called dangote, there are equally other business entrepreneurs doing fine,even better, its not about quantity ,its more about quality.

so with the scandals and series of ilegalities happening in the NSE, i guess this is an online PR attempt to increase his positive ratings.

naijatoday:

$14Billion?   

How did they arrive at this number, and what companies will be under Dangote Cement?


The only reason I am asking is because  Lafarge the largest building material manufacturer has a market cap of 11.2 billion pounds.

Well done for pointing this out. There is something fishy about this valuation.

erico2k2:

B4 U guys start praising him, have you guys noticed the Nigeria govt gave previlages to one person to import unbagged cement to Nigeria? and also the importation of things like suger and salt to just a few?ie our very Dangote?

the privileges were connected to the quantity his company produced in Nigeria, if you produce/manufacture a higher amount in Nigeria you get a higher percentage to import- its according to their past record and capacity within the country. Others screaming have since been given their license but rarely meet up with the demand while some even sold their allocation for cold cash!

Quote from: naijatoday on Today at 06:08:16 PM
$14Billion?

How did they arrive at this number, and what companies will be under Dangote Cement?


The only reason I am asking is because Lafarge the largest building material manufacturer has a market cap of 11.2 billion pounds.


Well done for pointing this out. There is something fishy about this valuation.


The article says the company will be listing 15.5 billion shares @ N135 each. I will try and use the market cap method to make the math easier assuming an exchange rate of N150 to $1

N135 = $0.9
15.5 billion shares X $0.9 = approx $13.9 billion

So from the above, their valuation seems accurate, the other company u guys mentioned might have a lower valaution if they have less outstanding shares (less than 15.5 billion shares), dont really have time to check some foreign company.

Have to tip your hat to this guy

Will be top Firm for a long time with all the building and developments going on all around Nigeria.


Thank you, Alhaji Aliko Dangote for believing in Allah, Nigeria and Nigerians. Allah has surely blessed you.

Good efforts by this man,

http://lekanbaruwa.

sizzlers:

i dont like this guy

pesin dem make im money u are sitting in your house in Asaba hating

Berra go and make ur own ego,

Could this guy be really worth that amount I doubt that, they really need to get some auditors to confirm the real worth, i am not beefing them but i feel the company is over valued

This is going to revive the stock market.
My fear here is that any slump in DCC will heavily affect the stock market.
This being that report has it that DCC market cap will be more than the 23 consolidated banks put together. I won buy share oo, which way to go fellas !!

dare0834:

Could this guy be really worth that amount I doubt that, they really need to get some auditors to confirm the real worth, i am not beefing them but i feel the company is over valued

this is a press release, press releases are not audited.
plus it is inaccurate valuations that drive a market. when a share is under valued u buy, conversely when its overvalued, u dont buy/sell. best is to have INDEPENDENT RESEARCH done.
my 2 cents

$14b?
me thinks it's been overvalued
or is it a ploy to 'cajole' us to buy into it @ 135 naira?

Dangote never stops thinking up new ways to generate wealth. That's why he's one of two $-denominated Nigerian billionaires in the world today. His business savvy is remarkably astute & worthy of emulation.

gregg2:

$14b?
me thinks it's been overvalued
or is it a ploy to 'cajole' us to buy into it @ 135 naira?

probably