The merger between Pembani Group and Shanduka has been sealed and the new industrial holding company is ready to shake things up.
On Monday Pembani‚ which has a R9-billion portfolio after the tie-up‚ said the cement industry‚ in which it is a key player‚ had a duty to respond to disruptions caused by the entrance of new players‚ cheap imports and expanded capacity.
Pembani chief executive officer Kennedy Bungane, said the group would pursue opportunities in the rest of sub-Saharan Africa.
Pembani’s 20% investment in Engen is one of its more prominent assets and the fuel retailer has operations in 17 countries across the continent.
Regulatory filings to the Mineral Resources Department and the competition authorities have been filed to combine the interests of Pembani with those of Shanduka‚ which it acquired following the departure of Deputy President Cyril Ramaphosa‚ who sold his Shanduka stake after rejoining the government last year.
The deal will also transform Standard Bank’s and Ramaphosa’s family trust Jadeite’s Shanduka stakes into minority ownership in Pembani. Shanduka Resources owns about 50% of Incwala Resources‚ an indirect investor in platinum producer Lonmin.
But the first substantial move by Pembani is likely to be in the cement industry.
Last year Afrisam‚ which Pembani controls‚ made an unsuccessful bid for larger competitor PPC.
“The cement industry in SA has changed radically and permanently‚” he said. “I do not rule out a response by the market to these disruptions,” Bungane said.
Afrisam wrote to PPC‚ SA’s largest cement-maker‚ in December, offering a combination of the entities. After considering the proposal – but without presenting it to a shareholder vote – the PPC board rejected the overture in March‚ saying it did not believe there would be enough synergies to justify a merger.
In a similar move‚ Bidvest Group won control of drug manufacturer Adcock Ingram after its friendly overtures were rejected by the Adcock board before investors were consulted. The Public Investment Corporation’s (PIC) vote proved decisive.
Although only a 30.5% investor in Afrisam‚ Pembani controls it through an agreement with the PIC‚ which is a 66% shareholder.
The PIC is also PPC’s single largest investor with a 12% stake. Pembani chairman Phuthuma Nhleko is also Afrisam chairman.
He is credited with helping turn MTN‚ of which he was CEO and is still chairman‚ into an African and Middle Eastern telecoms giant spanning 23 countries. Nigerian-backed Sephaku Cement has opened two new plants and Chinese-backed Mamba Cement one.
Though Bungane would not elaborate on Pembani’s plans for Afrisam‚ he said it was important for businesses to respond to changing conditions.
It owns 63% of Tanzania’s Tanga Cement‚ which Bungane said would be used to enter the rest of East Africa‚ where a shortage of cement capacity makes for good profit margins. — BDLive
Two major players cement their ties
On Monday Pembani‚ which has a R9-billion portfolio after the tie-up‚ said the cement industry‚ in which it is a key player‚ had a duty to respond to disruptions caused by the entrance of new players‚ cheap imports and expanded capacity.
Pembani chief executive officer Kennedy Bungane, said the group would pursue opportunities in the rest of sub-Saharan Africa.
Pembani’s 20% investment in Engen is one of its more prominent assets and the fuel retailer has operations in 17 countries across the continent.
Regulatory filings to the Mineral Resources Department and the competition authorities have been filed to combine the interests of Pembani with those of Shanduka‚ which it acquired following the departure of Deputy President Cyril Ramaphosa‚ who sold his Shanduka stake after rejoining the government last year.
The deal will also transform Standard Bank’s and Ramaphosa’s family trust Jadeite’s Shanduka stakes into minority ownership in Pembani. Shanduka Resources owns about 50% of Incwala Resources‚ an indirect investor in platinum producer Lonmin.
But the first substantial move by Pembani is likely to be in the cement industry.
Last year Afrisam‚ which Pembani controls‚ made an unsuccessful bid for larger competitor PPC.
“The cement industry in SA has changed radically and permanently‚” he said. “I do not rule out a response by the market to these disruptions,” Bungane said.
Afrisam wrote to PPC‚ SA’s largest cement-maker‚ in December, offering a combination of the entities. After considering the proposal – but without presenting it to a shareholder vote – the PPC board rejected the overture in March‚ saying it did not believe there would be enough synergies to justify a merger.
In a similar move‚ Bidvest Group won control of drug manufacturer Adcock Ingram after its friendly overtures were rejected by the Adcock board before investors were consulted. The Public Investment Corporation’s (PIC) vote proved decisive.
Although only a 30.5% investor in Afrisam‚ Pembani controls it through an agreement with the PIC‚ which is a 66% shareholder.
The PIC is also PPC’s single largest investor with a 12% stake. Pembani chairman Phuthuma Nhleko is also Afrisam chairman.
He is credited with helping turn MTN‚ of which he was CEO and is still chairman‚ into an African and Middle Eastern telecoms giant spanning 23 countries. Nigerian-backed Sephaku Cement has opened two new plants and Chinese-backed Mamba Cement one.
Though Bungane would not elaborate on Pembani’s plans for Afrisam‚ he said it was important for businesses to respond to changing conditions.
It owns 63% of Tanzania’s Tanga Cement‚ which Bungane said would be used to enter the rest of East Africa‚ where a shortage of cement capacity makes for good profit margins. — BDLive
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