The Cement Company of Northern Nigeria (CCNN) has received the approval of its shareholders to merge with Obu Cement Plc as it continues to apply inorganic growth to compete against Dangote Cement in the dominated market. The new merger plan is coming eleven months after CCNN merged with Kalambaina Cement.
CCNN now awaits the approval of the Securities and Exchange Commission (SEC) to complete the merger. The shareholders gave their approval at a court-ordered general meeting where 157 out of 170 accredited shareholders voted in favour of the merger.
The merger is expected to create additional value for the shareholders. With their approval, the probability of SEC and the Federal High Court granting the merger is high.
Speaking on the shareholders’ approval, the Chairman of the CCNN, Abdulsamad Rabiu said, “The total number of shares held by shareholders present and who voted was 307,027,755 shares, and voted in favour of the resolution approving the scheme which represents 99.93 per cent. Based on the results of the poll, the motion for the merger of CCNN with Obu Cement was unanimously carried.
“The report of the result of this meeting will be filed with the Securities and Exchange Commission for its final approval. Following the final approval by SEC, a copy of the result will also be submitted to the federal high court.”
CCNN chasing inorganic growth: Inorganic growth is the use of merger or acquisition to enlarge the size, capability and market presence of a company. It is used in various industries including the banking industry where Access Bank has been a major benefactor. This is the approach of CCNN to better compete in a market that is largely dominated by Dangote Cement. CCNN had in January 2019 merged with Kalambaina Cement. The enlarged CCNN is now positioned to compete effectively and be more accessible in existing and new markets.
According to a report, the company said, “The proposed merger will increase the production capacity of the enlarged company to 8 million MTPA. It is anticipated that in addition to meeting the demand from customers in the core regions in the country, the enlarged company would be positioned to distribute its products in new geographical markets, creating the potential for additional shareholder value creation.