South Africa: Could It Be Third Time Lucky for PPC in Possible Tie-Up With Afrisam?

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PPC Southern Africa MD Njombo Lekula believes there is a merger opportunity with smaller rival AfriSam in the future. Since 2014, both companies have twice attempted to combine their operations, but PPC shareholders blocked a merger. Lekula said the pressing issue is cheap cement imports from China and Vietnam that are hurting SA's cement industry.

It might be a case of third time's a charm for SA's largest cement-maker PPC in its possible merger with AfriSam.

PPC has not ruled out a potential merger with smaller rival AfriSam, saying a tie-up between both parties in the future would still be prudent for building an African cement titan.

Since 2014, both companies have twice attempted to combine their operations, but major PPC shareholders fiercely objected, saying the proposed merger was to rescue an indebted AfriSam that desperately needed a recapitalisation.

The last collapse in merger talks was in December 2017. At the time, AfriSam, chaired by prominent businessman Phuthuma Nhleko, faced an R8-billion debt load and its major shareholder, the Public Investment Corporation (holding about 66%), was reluctant to inject more money into the company.

A successful merger with PPC (also involving Canada-based investment holding firm Fairfax Africa Investments) would have...

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