Unbridled PPC rally keeps rivals salivating
Cement makers scramble to merge with SA stalwart
Since the Phuthuma Nhleko-owned AfriSam announced it was planning a new merger proposal for its long admired and larger rival PPC, the shares of the 125-year- old cement producer have rallied about 40%. It's this share rally since late August, and an almost threefold rise in PPC's net profit for its half-year, that have the predators still circling. South African construction and related industries have come under significant strain over the past few years on the back of sluggish growth, both domestically and on the continent. A further dampening prospect for cement makers has been a flood of cheap imports. Consolidation has long been held up as a long-term solution for the highly indebted industry, and at the centre of all talk has been PPC, with one of Africa's richest men, Aliko Dangote, at some point looking to merge it with Sephako Cement. He subsequently withdrew interest. PPC's unchallenged position in the Western Cape market and the coming on line of expansion projects in th...
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