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updated 6:54 AM SAST, Mar 14, 2031
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PIC supports cement tie-up as a ‘champion for SA’

PPC’s largest shareholder is supporting a joint offer for SA’s biggest cement maker from domestic rival AfriSam and Canadian insurer Fairfax Financial Holdings as the tie-up would create a national champion, say people familiar with the matter.

The Public Investment Corporation (PIC), Africa’s biggest money manager, sees the three-way deal as a way for an enlarged cement maker to expand more effectively on the continent, said two of the people, who asked not to be identified as the PIC’s position was private.

The sources said the manager of government-worker pension funds also saw significant cost savings from the merger.

PPC’s spokeswoman said the board would consider all offers equally in the best interest of the company’s shareholders.

The PIC first indicated its support for a merger between PPC and AfriSam in a letter last month, before Fairfax entered the talks. Its continued backing will come as a boost to the potential buyers as they prepare for a possible challenge from rival bidders.

Nigeria’s Dangote Cement, controlled by Africa’s richest man, Aliko Dangote, was among those considering a counter-offer, people familiar with the matter said last week.

They also said Swiss-based LafargeHolcim, the world’s biggest cement maker — with a presence in 90 countries — was also monitoring PPC’s situation.

The PIC owns about 11% of PPC and is also the largest shareholder in AfriSam with about 60%.

Fairfax’s proposal includes the purchase of R2bn of ordinary shares of PPC at R5.75 per share while helping AfriSam to pay off its debt.

Fairfax may have to raise the offer for PPC shares above R5.75 if another bid was tabled.

Dangote’s proposal values PPC stock at R6.25 each, a second person said, declining to give further details.

PPC management might regard a full-cash offer as more attractive than the Fairfax/ AfriSam proposal, though such an offer had yet to materialise, the person said.

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