Categorized | B-BBEE, Infrastructure

PPC and AfriSam merger to boost transformation in construction industry

CastleCement making giants PPC and AfriSam Group Limited have entered into a Heads of Terms to assess the merits of a potential merger between the two groups. PPC is a leading supplier of cement and related products in southern Africa, PPC Ltd has nine cement factories in South Africa, Botswana, Zimbabwe and Rwanda, while AfriSam is leading supplier of superior quality construction materials and technical solutions.

Darryll Castle, CEO of PPC explains “PPC and AfriSam have independently concluded that current market circumstances warrant entering into formal discussions to consider a merger.” As part of the discussions, PPC and AfriSam will jointly assess the potential benefits of the proposed merger for all stakeholders including the value that can be realised for the shareholders of the two companies. “Should the proposed merger proceed it will result in the creation of a South African-owned cement producer that is financially stronger, operationally more efficient, has deeper technical capability and is well placed to develop as a major African cement producer” said Castle.

PPC said the merged entity will be significantly empowered, given that Phembani Group Proprietary Limited (a major shareholder in AfriSam) and other empowered investors (including PPC’s existing broad-based black economic empowerment (“B-BBEE”) shareholders) will own a significant share of the merged entity. This will be in addition to PPC’s announced intention   to   implement   a   further   B-BBEE ownership transaction (“PPC’s Proposed B-BBEE Transaction”). As part of the assessment of the Proposed Merger, and as a condition to agreeing to pursue the proposed merger, the parties need to confirm their preliminary view that the merged entity will be significantly empowered, including being satisfied with the potential impact of the proposed merger on PPC’s Proposed B-BBEE Transaction.

The discussions between PPC and AfriSam regarding the Proposed Merger, if implemented, may have a material impact on the price of the Company’s shares. Accordingly, shareholders are advised to exercise caution when dealing in securities of the Company until such time a further announcement is made, read a statement on the Johannesburg Stock Exchange (JSE) information dissemination service, SENS.

 

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