The Senate has approved the controversial $1 billion acquisition of Lafarge Africa Plc by Chinese firm Hainan Huaxin Pan-African Investment Company Plc, dismissing concerns over the transaction and assuring Nigerians that the country’s 16.19 per cent equity stake in the cement giant will remain untouched.
The upper legislative chamber gave its approval on Thursday after adopting the report of its ad hoc committee chaired by Senate Minority Leader, Senator Abba Moro, which investigated Holcim AG’s proposed divestment of its majority stake in Lafarge Africa.
The committee was constituted seven months ago following widespread public concerns over the ownership structure of Lafarge Africa and fears that the planned acquisition could undermine Nigeria’s interests.
Presenting the report, Moro said the committee’s engagement with relevant stakeholders revealed no legal or regulatory impediment to the transaction.
According to him, the acquisition should proceed, provided all applicable Nigerian laws are strictly complied with throughout the transition process.
“The Senate allowed the transaction process concerning the sale of Lafarge Cement Company Plc to Huaxin to scale through.
“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,” Moro said.
The committee explained that contrary to public perception, the deal does not involve the sale of a wholly Nigerian company but rather the transfer of ownership from one foreign investor to another, with Holcim selling its controlling stake to Huaxin.
It maintained that the rights of Nigerian investors would remain unaffected, stressing that the 16.19 per cent equity owned by Nigerians would remain intact after the acquisition.
The lawmakers also disclosed that regulatory agencies found no evidence that the transaction violates Nigeria’s legal framework or poses any threat to national security.
According to the report, Huaxin has pledged to inject fresh capital into Lafarge’s Nigerian and African operations, a development expected to strengthen the company’s operations, boost industrial growth and attract more foreign direct investment.
The committee further noted that Lafarge controls about 18 per cent of Nigeria’s cement market and that the acquisition would not significantly alter competition within the industry.
It also disclosed that the Federal Competition and Consumer Protection Commission (FCCPC) had received assurances from the acquiring company that there would be no staff retrenchment during the transition.
To ensure transparency, the Senate directed regulatory agencies, including the Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC), Federal Competition and Consumer Protection Commission (FCCPC), Nigerian Investment Promotion Commission (NIPC), and Bureau of Public Enterprises (BPE), to maintain strict oversight of the transaction.
The committee equally urged the new investors to strengthen their corporate social responsibility programmes in host communities.
Ningi Raises Questions Over Ownership Structure
Despite the committee’s recommendation, Senator Abdul Ningi (Bauchi Central) questioned the ownership details presented in the report, arguing that lawmakers were not given a complete breakdown of Lafarge Africa’s shareholding.
“I would have imagined that the report of the committee should specifically give us the shareholding structure.
“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,” Ningi said.
The senator also maintained that the transaction was merely a transfer of shares between two foreign companies rather than the sale of a strategic Nigerian asset.
“There is a misconception about the ownership of Lafarge.
“The current development is basically the transfer from one foreign ownership to another. Lafarge is a foreign company transferring its shares to another foreign company.
“I would have expected the committee to point us to the specific provisions of Nigerian law that permit such a transfer and to clearly state the ownership structure before asking us to approve the transaction,” he added.
However, Senators Osita Izunaso, Chairman of the Senate Committee on Capital Market, and Shuaib Salisu (Ogun Central) backed the committee’s recommendations, paving the way for the Senate’s approval of the transaction.
The approval comes months after the Senate launched an investigation into Holcim Group’s planned divestment of its 83.81 per cent controlling stake in Lafarge Africa.
During the probe, the Securities and Exchange Commission informed lawmakers that it had not received a formal filing on the proposed acquisition, explaining that it had only been notified of an internal restructuring within Holcim.
The Bureau of Public Enterprises also clarified that the shares being divested belong to Holcim and do not affect the 16.19 per cent equity held by Nigerian investors.
Following its review, the Senate concluded that the acquisition complies with existing Nigerian laws and adopted the committee’s report, effectively giving legislative backing to the $1 billion transaction.
