Senate clears $1bn Lafarge sale, as Ningi questions owner of 66% shareholding

The Senate has approved the proposed $1 billion acquisition of Lafarge Africa Plc by Chinese cement manufacturer Huaxin, despite concerns raised by some lawmakers over the company’s ownership structure.

The approval, however, came without an explanation of who owns the remaining 66 per cent equity in Lafarge Africa.

The approval followed the consideration of the report of the Senate Ad Hoc Committee set up to investigate the proposed sale by Holcim AG, the Swiss parent company of Lafarge Africa.

Presenting the report, Chairman of the committee and Senate Minority Leader Senator Abba Moro said the panel engaged relevant stakeholders and found no legal impediment to the transaction.

He recommended that the Senate allow the acquisition to proceed, provided all due process and extant Nigerian laws governing such transactions are strictly complied with.

The committee also urged regulatory agencies involved in the transaction to maintain effective oversight throughout the acquisition process to ensure compliance with all statutory requirements.

It further recommended that the incoming investors strengthen Corporate Social Responsibility (CSR) programmes in host communities where Lafarge operates.

However, the report sparked debate on the floor after Senator Abdul Ningi questioned the ownership structure presented by the committee.

Ningi observed that while the report indicated that Nigerian interests, including the Federal Government and local investors, held about 16 per cent equity in Lafarge Africa and Holcim owned about 18 per cent, it failed to explain who controls the remaining 66 per cent of the company’s shares.

He argued that without a clear picture of the ownership structure, lawmakers could not fully assess the implications of approving the transaction.

“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 lawmaker also dismissed claims that the transaction involved the sale of a strategic Nigerian asset, maintaining that available information suggested it was merely a transfer of ownership from one foreign company to another.

“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.

Despite the concerns, no clarification was provided on the Senate floor regarding the ownership of the outstanding 66 per cent equity before the report was adopted.

Senator Danjuma Goje supported the transaction but urged the new investors to improve relations with host communities through better corporate social responsibility initiatives.

He lamented that Lafarge had failed to fulfil several CSR commitments in Gombe State and called for stronger oversight to ensure the incoming owners met their obligations.

Also supporting the report, Chairman of the Senate Committee on Capital Market, Senator Osita Izunaso, said the committee had carried out a thorough review of the proposed acquisition before recommending its approval.

Similarly, Senator Shuaib Salisu also backed the report, noting that all critical stakeholders participated in the review process.

After deliberations, the Senate adopted the report and approved the continuation of the $1 billion acquisition, directing all relevant regulatory agencies to ensure strict compliance with Nigerian laws throughout the transaction.