The Senate has thrown its weight behind the proposed $1 billion acquisition of Lafarge Africa Plc by Chinese investor Hainan Huaxin Pan-African Investment Company Plc, declaring that the deal will not affect the interests of Nigerian shareholders who own 16.19 per cent of the cement company.
The upper chamber approved the transaction after adopting the report of its ad hoc committee set up to investigate the planned divestment by Swiss cement giant Holcim AG, which currently holds an 83.81 per cent stake in Lafarge Africa.
The committee, chaired by Senate Minority Leader, Senator Abba Moro, was mandated to examine concerns surrounding the ownership structure of the company, the implications of the proposed sale and its potential impact on the Nigerian economy.
Presenting the committee’s findings during plenary, Moro said investigations and consultations with relevant stakeholders showed that there was no legal barrier to the transaction.
He explained that the acquisition should proceed provided all statutory requirements and regulatory approvals are strictly observed.
“The Senate allowed the transaction process concerning the sale of Lafarge Cement Company Plc to Huaxin to scale through,” Moro said.
“However, all due processes and strict compliance with all Nigerian extant laws on the subject must be followed and adhered to strictly for a hitch-free transaction and transition process.”
The committee stressed that the transaction involves the transfer of ownership from one foreign investor to another and does not amount to the sale of a wholly Nigerian-owned company as widely perceived in some quarters.
According to the report, Holcim’s decision to divest its controlling stake simply means that ownership will move from a Swiss investor to a Chinese investor, while the shareholding interests of Nigerian investors remain unchanged.
The lawmakers noted that concerns raised by the public largely stemmed from misconceptions about the ownership structure of Lafarge Africa.
The committee concluded that the rights and equity of Nigerian shareholders would remain fully protected after the transaction.
It further stated that regulatory agencies found no evidence that the proposed acquisition violated any Nigerian law or constituted a threat to national security.
To ensure transparency, the committee recommended that regulatory institutions including the Securities and Exchange Commission, Corporate Affairs Commission, Federal Competition and Consumer Protection Commission, Nigerian Investment Promotion Commission and Bureau of Public Enterprises continue to monitor the transaction closely.
The lawmakers also urged the incoming investors to deepen corporate social responsibility initiatives in communities where Lafarge operates.
According to the report, Huaxin has pledged to inject additional capital into Lafarge’s operations in Nigeria and other African markets, a move expected to enhance productivity, encourage industrial expansion and attract further foreign direct investment.
The committee observed that Lafarge controls approximately 18 per cent of Nigeria’s cement market and that the acquisition is unlikely to distort competition within the sector.
It also cited assurances from the FCCPC that the new investors have no plans to retrench workers during the transition period.
During deliberations on the report, Senator Abdul Ningi of Bauchi Central questioned aspects of the company’s ownership structure and called for greater clarity regarding the distribution of shares.
He argued that while the report identified Nigerian shareholders and Holcim’s stake, lawmakers should be provided with a more comprehensive breakdown of ownership.
“I would have imagined that the report of the committee should specifically give us the shareholding structure,” Ningi said.
“Nigerians have about 16 per cent, Lafarge has 18 per cent. Who owns the remaining 66 per cent? We need to understand where we are coming from.
“It is only when we know who owns the remaining shares that we can determine whether Nigerians are actually benefiting from this transaction.”
The senator also maintained that the development was essentially a transfer of ownership between two foreign companies rather than the disposal of a strategic national asset.
“There is a misconception about the ownership of Lafarge. The current development is basically the transfer from one foreign ownership to another,” he added.
Despite the concerns, lawmakers overwhelmingly backed the committee’s recommendations.
Chairman of the Senate Committee on Capital Market, Senator Osita Izunaso, and Senator Shuaib Salisu of Ogun Central were among those who supported the report, arguing that the transaction could help strengthen the company and attract additional investment into the economy.
The Senate subsequently adopted the report, effectively giving legislative approval to the acquisition.
The endorsement follows months of scrutiny after Holcim announced plans to dispose of its 83.81 per cent stake in Lafarge Africa.
During earlier investigations, the Securities and Exchange Commission informed lawmakers that it had not received a formal filing on the transaction and had only been notified of an internal restructuring process by Holcim.
The Bureau of Public Enterprises also clarified that the proposed sale concerns Holcim’s shares and does not affect the 16.19 per cent stake held by Nigerian investors.
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