Holcim AG, the Swiss multinational building materials giant, has reached an agreement to sell its 83.8% stake in Lafarge Africa to Huaxin Cement Co., a prominent Chinese cement manufacturer, in a deal valued at $1 billion. The transaction, expected to be finalized in 2025, remains subject to regulatory approval.
The move is part of Holcim’s ongoing strategy to streamline its global portfolio by divesting from non-core markets. Lafarge Africa, currently valued at N934 billion (approximately $556 million), could see its market capitalization nearly double on the Nigerian Stock Exchange if the new owners opt not to delist the company. This could significantly reshape the landscape of Nigeria’s cement industry.
Huaxin Cement’s acquisition represents a strategic entry into the Nigerian market. Founded in 1907, Huaxin is ranked among China’s top 10 cement producers and is publicly listed on the Shanghai Stock Exchange with a market capitalization of around $2.18 billion. For the nine months ending September 30, 2024, the company posted revenues of 24.7 billion Chinese Yuan (approximately $3.4 billion), and net income of 1.14 billion Chinese Yuan ($157 million).
This sale follows Holcim’s recent divestments in other regions, including its 2021 sale of a 75% stake in Lafarge Zambia to Huaxin, which valued the company at $100 million and rebranded it as Chilanga Cement. Additionally, Holcim exited several operations in the Indian Ocean region, including Lafarge Madagascar, Lafarge Reunion, and Lafarge entities in Comoros, Mayotte, and Seychelles.
In comparison, Lafarge Africa reported revenue of N479.5 billion ($320 million) and a net income of N60.1 billion ($40.1 million) for the same period. The company’s strong profit margins make it an attractive asset for Huaxin, which aims to enhance its position in Africa’s rapidly expanding cement market.
The divestment also reflects a broader trend of foreign companies, particularly European and American corporations, scaling back their operations in Nigeria amid changing economic conditions and a shift towards local and regional market players.