By Peter Egwuatu

The shareholders of both Benue Cement Company (BCC) Plc and Dangote Cement Plc (DCP) have been granted approval by the federal high court to hold a meeting ratifying the merger involving both companies after getting approval from both the Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE) .

The meeting according to the managing director of BCC Plc, Mr. Shree Junnarkar would hold on September 28, 2010.

Speaking at the stockbrokers forum in respect of the proposed merger in Lagos, Wednesday, Junnakar stated that the Board of Directors and management of the company are confident that the scheme of the merger will achieve a variety of strategic, operational and administrative goals and recommended that shareholders vote in favour of the sub-joined resolutions to be proposed at the court ordered meeting./

He disclosed that the proposed transaction will result to all the assets and liabilities and undertakings including real properties and intellectual property rights of BCC be transferred to DCP

According to him, “ BCC shareholders will receive shares in the enlarged DCP to be credited as fully paid in exchange for ordinary shares held in BCC on the terminal date. Also, BCC shareholders become shareholders of the enlarged DCP.

Speaking at the forum also, Stanbic IBTC Plc, Adviser on the merger stated that BCC’s shareholders would receive 1 DCP share in exchange for every two held in BCC.

In line with the terms of the merger, 494,019,668 DCP ordinary shares of 50 kobo each would be issued to the minority shareholders of BCC; increasing DCP’s number of shares outstanding to 15,494,019,668 from its current 15,000,000,000 shares.

The effective date” of the merger is the date the court sanctions the merger scheme, which would have been preceded by separate court ordered meetings of DCP and BCC shareholders.

Based on the indicative timelines in the “Scheme of Merger”, BCC shares would be placed on full suspension two days after the “Effective Date” of the merger and subsequently de-listed, following which shares of the combined DCP would be listed on 5th November 2010.

Dangote Cement owns and operates the 5 million tonnes Obajana Cement Plant, which is the largest cement plant in sub-Saharan Africa.

In view of DCP’s continuing investment in expansion, the 3rd and 4th Obajana lines as well as the 6 million tonnes Ibeshe plant are expected to become operational by Q1’11. This brings DCP’s total capacity to c.19 million tonnes per annum by 2011, making the company well poised to drive revenue through robust volume growth.

Another key competitive advantage of Dangote Cement is the close proximity of its cements to the major markets for cement consumption in Nigeria – Lagos and Abuja specifically.

On the share structure of the company, DCP currently holds 74.77 per cent of the equity in BCC, while BCC shareholders hold 25.23 per cent.DCP, previously known as Obajana operates multiple domestic cement manufacturing and bulk import terminal operations across Nigeria.

Obajana plant is the largest in Sub-Saharan Africa. It has a turnover of 190 billion in 2009, with operating profit of N66 billion and a total assets of 316 billion.