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, was granted without clarification on the ownership of the remaining 66 per cent equity in Lafarge Africa.
The decision followed the consideration of the report of the Senate Ad-hoc Committee constituted to investigate the proposed acquisition by Holcim AG, the Swiss parent company of Lafarge Africa.
Presenting the report, the 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 approve the acquisition, provided all due process requirements and existing Nigerian laws governing such transactions were 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 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 during plenary after Senator Abdul Ningi questioned the committee’s ownership structure.
Ningi observed that while the report indicated that Nigerian interests, including the Federal Government and local investors, held about 16 per cent of Lafarge Africa’s equity, and that Holcim owned about 18 per cent, it did not disclose who controls the remaining 66 per cent of the company’s shares.
He argued that without a clear understanding 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 represented the sale of a strategic Nigerian asset, arguing that it was essentially a transfer of ownership from one foreign company to another.
“There is a misconception about the ownership of Lafarge. The current development is essentially a transfer of foreign ownership. 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.
To support the transaction, Senator Danjuma Goje urged incoming investors to improve relations with host communities by strengthening their corporate social responsibility initiatives.
Goje lamented that Lafarge had failed to fulfil some CSR commitments in Gombe State and called for closer monitoring to ensure the new owners meet their obligations.
Also supporting the report, Chairman of the Senate Committee on Capital Market, Senator Osita Izunaso, said the committee conducted a thorough review of the proposed acquisition before recommending its approval.
Similarly, Senator Shuaib Salisu backed the report, noting that all critical stakeholders participated in the review process.
Following deliberations, the Senate adopted the committee’s report and approved the continuation of the $1 billion acquisition, directing relevant regulatory agencies to ensure strict compliance with Nigerian laws throughout the transaction.
