Cement merger not yet set
Why AfriSam needs PPC
PPC investors are in a state of suspense, waiting for AfriSam to make a third attempt in as many years to merge the companies
The share price of cement maker PPC halved in value in the six months the company was the subject of a merger proposal with smaller rival AfriSam. Though it bounced back to more than 500c this week, the stock is still 23% below its level on February 14, the day it announced the latest merger talks with AfriSam. Crucially, PPC shares are now worth just one-sixth of their R36 high of August 2013. Investors in SA’s largest cement producer are now in a state of suspense, waiting for AfriSam to make a third attempt in as many years to merge the debt-laden companies. "We will soon meet and exceed that expectation," says an influential source at AfriSam, who could not be named due to the sensitivity of the talks. The previous two attempts initiated by the smaller operator — in December 2014 and February — were called off after a few months. AfriSam needs the merger more than PPC does. The company produces just 4.1Mt/year of cement in SA and Lesotho, where the 200,000Mt/year Maseru plant is...
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