Dubai fund invests in Nigeria’s Dangote Cement

09 September 2014

Sovereign fund Investment Corp of Dubai (ICD) has bought a 1.4% stake in Dangote Cement, Nigeria’s biggest company by market capitalisation, for $300 million.
Dangote Cement spokesman Carl Franklin confirmed the sale, but provided no further details.

Stockbrokers in Lagos told Reuters 243 million shares of Dangote Cement were transferred to ICD, which holds stakes in some of the emirate’s top companies, at 200 naira each, a 12% premium to Dangote Cement’s price of 223 naira.

“ICD is diversifying its portfolio … into the West African market through a minority stake in Dangote Cement. We believe this bodes well for future investments into Nigeria from the Middle East,” Akinbamidele Akintola, an Africa equity sales executive at Renaissance Capital, said.

Dangote Cement is expanding, building plants across Africa to reach 62 million tonnes capacity annually by 2017.

It reported pretax profit of 107.1 billion naira ($659.4 million) in the first half on revenues of 208.9 billion naira.

Shares in Dangote cement traded flat at 223 naira on Monday, valuing Nigeria’s biggest company at about 3.97 trillion naira ($24.5 billion).

Dangote Cement faces competition in Africa from French cement maker Lafarge which is combining its Nigerian and South African businesses to accelerate growth on the continent.
Last year, Dangote Industries sold a 1.5% of its 95% stake in Africa’s biggest cement producer to South Africa’s Public Investment Corporation (PIC) for $289.3 million.
Middle East companies are expanding in Africa. Last week, Qatar National Bank (QNB) bought a 12.5% stake in pan-African lender Ecobank for about $200 million.

By Chijioke Ohuocha and Praveen Menon

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