By Peter Egwuatu
Shareholders of Benue Cement Plc (BCC) on Tuesday endorsed the proposed merger with Dangote Cement Plc (DCP) to form a larger cement entity that would yield many benefits to them.
Addressing the shareholders at the Court-ordered Meeting held in Kano, on Tuesday, Chairman of BCC, Alhaji Aliko Dangote, said that the merger when consummated, will facilitate better access to financing, adding that the post-merger entity would have a bigger balance sheet and a larger collection of high quality assets that can potentially be pledged as collateral to lenders.
According to him, by joining DCP, BCC shareholders would have the opportunity of becoming part owners of DCP assets spread across the country and enjoy tax holiday that the company is having currently. “The proposed merger is conceived with the goal of consolidating the cement producing entities of Dangote Industries Limited in Nigeria under a single entity presenting a robust platform for the enlarged DCP to optimise on available growth opportunities having regard to the present state of the Nigerian cement industry. This is expected to significantly increase production capacity, boost turnover and profitability and eventually lead to an enhanced dividend payout and capital appreciation for the investors,” he said.
In the same vein, Managing Director of BCC, Mr. Shree Junnarkar, told the shareholders that the merger will increase value generation through the streamlining of the management, operations and processes of both companies, thereby leveraging positive economies of scale in purchasing and manufacturing, and unifying the companies, distribution and sales strategies.
“The directors of DCP and BCC are of the opinion that significant cost – revenue synergies will accrue from the merge to create additional value to the shareholders of both companies,” he said.
Junnarkar further stated that the enlarged entity will present value proposition for shareholders and existing BCC shareholders would especially benefit from expected significant immediate accretion in earnings and net assets per share post merger.
Shareholders who spoke at the meeting commended the merger proposal, saying “it would benefit them immensely and pledged their support for the exercise.
Dr, Faruk Umar, said it is an opportunity for the shareholders to own shares of a bigger firm with higher future prospects and hailed Dangote for the decision to share his fortunes with other investors”.
Mrs. Esther Funke Augustine, also commended the merger, saying shareholders have been benefiting from BCC since the Dangote Group took over the company a few years back.
Accordng to her “ the merging with DCP would lead to more dividends for them going forward. We therefore urged Dangote to protect the interest of the minority shareholders all the time”.
Speaking, Alhaji Mukhar Muktar said, “ shareholders are behind the merger and would continue to support the DangoteGroup. It is the listing of companies in the Group on the NSE that is the best thing that has ever happened in the Nigerian capital market.
Meanwhile, the Managing Director of Afrinvest (West Africa ) Limited, Mr. Ike Chioke, who is one of the financial advisers to the merger, said apart from the benefits to shareholders, the listing of the enlarged company would boost the market capitalisation of the NSE.
According to him “the enlarged entity is expected to add N2.1 trillion to the market capitalisation of the NSE. I, therefore, urge investors to take advantage of the current market price of BCC and buy into the enlarged DCP that would be listed at N135 per share.