Cement. Picture: THINKSTOCK
Cement. Picture: THINKSTOCK

PPC and AfriSam have revived talks to potentially merge their operations, nearly two years after the cement makers abandoned them.

PPC said in a statement on Monday that both parties had concluded that current market circumstances warranted entering into formal discussions to consider the proposed merger.

“As part of such discussions, the parties will jointly assess the value that they believe can be realised for the shareholders of PPC and AfriSam if the proposed merger is implemented.”

PPC and AfriSam are searching for growth opportunities on the continent to offset a tough South African market, which is under pressure from low demand, oversupply and rising competition.

AfriSam has a cement plant in Tanzania, while PPC has existing operations and plants in Rwanda, the Democratic Republic of Congo, Ethiopia and Zimbabwe.

The proposed deal would “create a South African-owned cement producer that is financially stronger, operationally more efficient and has deeper technical capability”, PPC said.

Robert Group’s head of investments, Devin Shutte, said the sector had struggled with slowing revenues as economic growth and infrastructure spend in its key markets had been lacklustre.

“Both companies will hope to unlock synergies through the merger, and form an entity that can compete more effectively with other multinational and regional players,” Shutte said.

PPC stock price jumped as much as 10% to R7.71 on Monday morning, its best level since August.

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