Tanga Cement factory. The company has asked shareholders to remain cautious. PHOTO | FILE The German multinational building materials company, which already owns majority shares in Tanzania Portland Cement Company , signed an agreement through its subsidiary Scancem International DA to acquire 68.33 percent of Tanga Cement shares for an estimated Tsh137.33 billion ($59.61 million) by mid next year.
The deal places the German firm head to head with Nigeria’s Dangote Cement as the country’s cement market leader by both production capacity and output through its double-sworded local investment in Twiga and Tanga Cement which operates under the brand name Simba.
There was high appetite last week for Tanga Cement shares at Dar es Salaam Stock Exchange following the confirmation of its pending takeover by HeidelbergCement Africa.
The German multinational building materials company, which already owns majority shares in Tanzania Portland Cement Company, signed an agreement through its subsidiary Scancem International DA to acquire 68.33 percent of Tanga Cement shares for an estimated Tsh137.33 billion ($59.61 million) by mid next year.
The acquisition price will be paid to Afrisam Mauritius Investment Holdings Ltd, which is currently Tanga Cement’s main shareholder, but remains "subject to adjustments related to debt, working capital and other potential expenses" after the deal is closed, HeidelbergCement said in a joint statement with Afrisam.
"As such, it is important to note that material uncertainty exists currently on the final acquisition price," the statement added.
The deal places the German firm head to head with Nigeria’s Dangote Cement as the country’s cement market leader by both production capacity and output through its double-sworded local investment in Twiga and Tanga Cement which operates under the brand name Simba. The two companies are both listed on the DSE but Simba’s fortunes have plummeted drastically in recent years against the increasing domestic market dominance of rivals Dangote and Twiga.
Tanga Cement failed to pay dividends to its shareholders for a third year running in 2020, choosing instead to continue "committing available current cash resources to fulfilling operational and debt service commitments so as to remain sustainable," according to board chairman Lawrence Masha.
On Tuesday, a total of 6,980 Tanga Cement shares were traded at the DSE at a weighted average price of Tsh 450 ($0.20) in one deal by an unnamed buyer, jacking up the company’s share value by 9.76 percent from Tsh410 ($0.18), the highest share price increase of the day on the bourse.
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