Dangote Cement, a member of Dangote group has approached South African cement producer, (PPC), for takeover bid, but talks are at preliminary stages, Media reported on Thursday.
PPC is already considering a bid by local rival, AfriSam, which launched a new all-share bid that values PPC at about 9.2 billion rand
Dangote Cement bid for PPC is a way to increase its visibility in the South Africa and surrounding SADC market.
PPC offers the prospect of a much larger business than DangCems current operation in South Africa through Sephaku Cement.
Annual Financial Statement for the Full Year Ended March 31, 2017, shows that Sephaku Cement had revenues of R2.28 billion (178 million dollars) in 2016 (see Fig 1).
This compares to PPC which had revenues of R9.6 billion ($748 million) in 2016, about four times that of Sephaku.
Obviously, DangCem would love to own the bigger company and has signalled it would be open to a sale of all or part of its cement operations in Sephaku Cement to win regulatory approval for a takeover.
Reuters