DG Khan Cement has shown interest in acquiring Lafarge Pakistan Cement Limited, The News learnt on Wednesday.
The major shareholder Sofima SAS, a fully-held direct subsidiary of Lafarge SA, is divesting 100 percent shares of its shares.
DG Khan Cement (DGKC) informed all three stock exchanges and the Securities and Exchange Commission of Pakistan that it had received approval from its board of directors to participate in this [buying] process and to take part in due diligence.
The cement maker has appointed The Next Capital Limited as manager to the proposed transaction.
Lafarge Pakistan, in a separate notification last week, notified that Sofima SAS was in the process to divest 75.86 percent of its shares.
Divestment from Lafarge Pakistan came after merger of the major shareholder with Holcim earlier this month. Consequently, LafargeHolcim came into being, which is the most advanced group in building materials industry, uniquely positioned in 90 countries around the world with a balanced exposure to both developed and high growth markets.
Lafarge Pakistan is the only multinational company in cement sector of the country. It is listed on Karachi, Lahore and Islamabad stock exchanges, while its export markets include India, Afghanistan and Tajikistan.
The company’s workforce is over 800 employees and its businesses include 65.6 percent in cement, 33.8 percent in aggregates and concrete and its 0.6 percent stake is in other businesses.
Ahsan Mehanti, chartered accountant and analyst at Arif Habib Corporation, said that currently none of the companies had shown interest in the purchase of Lafarge Pakistan, while bidding process and interest would come on the scene once due diligence process is over.
“Lafarge SA does not want to stay in Pakistan and it is its own decision,” said Mehanti.
He said that he was happy with DG Khan Cement entering in the process of due diligence, which might end up in purchasing of Lafarge Pakistan. “It is good for a Pakistani company to invest in our own country rather than diverting investment abroad,” he said.
Furqan Ayub, an analyst at JS Research, said according to the notice issued by DG Khan Cement, the company had expressed its interest to acquire the 100 percent stake of Lafarge SA in Lafarge Pakistan (LPCL).
“At present, Lafarge SA has a 73 percent stake in LPCL. Interestingly, Vision Holdings Middle East (currently holding 47 percent stake in Pioneer Cement) has also shown interest in the same acquisition,” said the analyst.
LPCL has an installed capacity of 2.4 million tonnes per annum with its plant located in Chakwal, Punjab.
“If DGKC acquires LPCL, it will become the second largest cement producer of Pakistan – ahead of Bestway Cement,” Ayub said.
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