Senate Clears $1bn Lafarge Sale to Chinese Firm, Says Nigerian Stake Safe

The Senate has endorsed the proposed $1 billion acquisition of Lafarge Africa Plc by Hainan Huaxin Pan-African Investment Company Plc, a Chinese firm, affirming that the transaction will not affect the 16.19 per cent equity held by Nigerian investors.

The approval followed the adoption of the report of an ad hoc committee chaired by Senate Minority Leader, Senator Abba Moro, during plenary on Thursday.

The committee was constituted seven months ago to investigate the proposed sale after concerns were raised over the ownership structure of Lafarge Africa and the possible implications of Holcim AG's decision to divest its majority stake in the company.

Presenting the report, Moro said the committee engaged relevant stakeholders and found no legal impediment to the proposed acquisition.

He said the Senate approved the transaction on the condition that all applicable Nigerian laws and regulatory requirements are fully complied with throughout the acquisition and 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 also directed key 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 the Bureau of Public Enterprises (BPE), to maintain strict oversight of the transaction.

It further urged the incoming investors to strengthen corporate social responsibility programmes in host communities.

According to the committee, concerns surrounding the transaction largely stemmed from the mistaken belief that Lafarge Africa is wholly Nigerian-owned.

The report explained that the transaction is essentially a transfer of ownership from one foreign investor to another, with Switzerland-based Holcim AG selling its majority interest to Huaxin.

It stressed that Nigerian shareholders would retain their existing 16.19 per cent equity in the company, with no reduction in their ownership rights.

The committee also stated that regulatory agencies found no evidence that the acquisition violates Nigeria's legal or regulatory framework or poses any immediate threat to national security.

It added that Huaxin had pledged to inject fresh capital into Lafarge's Nigerian and African operations, a move expected to strengthen production capacity, stimulate industrial growth and encourage foreign direct investment.

Lawmakers were also informed that Lafarge currently controls about 18 per cent of Nigeria's cement market and that the acquisition is not expected to significantly alter competition within the industry.

The committee disclosed that the FCCPC had received assurances from the acquiring company that no workers would lose their jobs during the transition.

During deliberations, Senator Abdul Ningi (Bauchi Central) questioned aspects of the ownership structure presented in the committee's report.

He argued that while the report indicated Nigerian investors held 16.19 per cent equity and Holcim controlled 83.81 per cent, lawmakers should have been provided with a clearer explanation of the company's overall shareholding arrangement.

"I would have imagined that the report of the committee should specifically give us the shareholding structure," Ningi said.

"It is only when we know who owns the remaining shares that we can determine whether Nigerians are actually benefiting from this transaction."

Ningi maintained that the proposed acquisition was not the sale of a strategic Nigerian asset but rather the transfer of ownership between two foreign companies.

"There is a misconception about the ownership of Lafarge. The current development is basically the transfer from one foreign ownership to another," he added.

He also urged the committee to identify the legal provisions permitting such transfers and provide greater clarity on the company's ownership structure.

However, Senators Osita Izunaso, Chairman of the Senate Committee on Capital Market, and Shuaib Salisu (Ogun Central) supported the committee's findings and recommended approval of the transaction.

The Senate subsequently adopted the report, giving legislative backing to the acquisition.

The Senate's decision follows months of legislative scrutiny after Holcim Group announced plans to divest its 83.81 per cent controlling stake in Lafarge Africa.

During the investigation, the SEC informed lawmakers that it had not received a formal filing for the proposed acquisition and had only been notified of an internal restructuring within Holcim.

Similarly, the Bureau of Public Enterprises clarified that the shares being sold belong entirely to Holcim and do not affect the 16.19 per cent stake held by Nigerian investors.

Following those submissions, the Senate committee invited Lafarge Africa's management and requested additional information from the Corporate Affairs Commission before concluding its review of the transaction.