Dangote group, the Cement producing section has approached South African cement producer, (PPC), for takeover negotiations, our source said that talks are still at the preliminary stages.
PPC are already considering a bid by local rival, AfriSam, which recently launched a new all-share bid that values PPC at about 9.2 billion rand
We believe that the interest of Dangote Cement in bidding for PPC is a way of increasing its visibility in the South Africa and surrounding SADC market.
PPC offers the prospect of a much larger business than DangCems current operation in South Africa through Sephaku Cement.
Annual Financial Statement for the full Year ended March 31, 2017 shows that Sephaku Cement had revenues of R2.28 billion (178 million dollars) in 2016.
This compares to PPC which had revenues of R9.6 billion ($748 million) in 2016, about four times that of Sephaku.
Obviously DangCem would love to own the bigger company and has signalled it would be open to a sale of all or part of its cement operations in Sephaku Cement to win regulatory approval for a takeover.