Few companies have nailed how to use mergers and acquisitions (M&As)—and divestments—as a strategy to grow and expand their businesses. When you think of M&A machines, if one tier-1 Nigerian bank doesn’t come to mind, remember the Holcim Group.
When CEO Miljan Gutovic told the World Economic Forum in January 2024, “If [the company] can, [it] will do 30 deals if it makes sense,” few people took him up on his offer.
Yet, the Swiss-based building conglomerate is about to pocket $1 billion from a divestment deal in Nigeria. Holcim, a majority shareholder in Lafarge Africa, agreed to sell its 83.8% shares at equity value to Chinese company, Huaxin Cement. The deal is expected to be completed in 2025, subject to regulatory approval.
Lafarge is Nigeria’s third-largest cement maker producing up to 10.5 million tonnes of cement yearly at full capacity. Holcim finalised the Lafarge acquisition in 2015 after describing it as a “merger of equals.” The merger was both companies’ plan to put Lafarge back on the map. Since 2018, the cement maker has been locked in a perennial battle against second-placed BUA Cement and won on a few occasions.
With a $1 billion exit, this is good business for Holcim which moves on to the next thing.
Holcim has traditionally adopted a move-fast approach to its acquisitions business. In H1 2024, it acquired 11 companies and sold four. In the third quarter of 2024, Holcim continued with six further acquisitions in Europe and Latin America.
Selling off its Nigerian business is on-brand for Holcim. It is also at the centre of a competitive sell-off in Kenya with Bamburi Cement, where it holds a 58.6% majority stake. Bamburi Cement received two offers from Tanzania’s Amsons Group and Kenya’s Savannah Clinker.
Amsons and Savannah Clinker submitted $182.9 million and $197.2 million bids respectively to acquire shares in the struggling Bamburi. Shareholders will vote by December 5, 2024, and the new owners are expected to be announced in 2025.
Holcim has announced its plan to refocus its North American operations and go public in 2025.
