Lafarge Africa Shrinks Amidst Legal Tussle
Lafarge Africa Plc lost about 10% of its market value on the Nigerian Exchange on Tuesday as investors’ sentiment weakened amidst an ongoing legal tussle. The bearish grip on the cement company extended while equity analysts estimates show potential upside in the cement company stock on increase volume drive, and capital spending.
But the ongoing legal tussle with a minority shareholder over transactions involving Holcim and Chinese investors appears to have put a lid on bargain hunting. Trading details from the Nigerian bourse showed that the cement company has seen sharp price depreciation, put its market value at 28% below the highest valuation achieved in 52 weeks.
The Nigerian Exchange had increased market value of Lafarge Africa beyond N2.485 trillion, but the cement stock continues to fall due to negative perception. Details from the Nigerian Exchange (NGX) platform revealed that the cement company’s share price fell to N110.85 on Tuesday as 3.427 million units valued at N385.410 million were transacted.
Lafarge Africa Plc reported an impressive H1’25 performance, anchored by a stronger-than-anticipated Q2 outturn, which saw impressive margin expansion on moderating cost pressures and strong pricing dynamics.
Following the release of the result, Analysts at CardinalStone Securities Limited revised their 12-month Target Price to N198.25 from N116.11 previously, implying a 41.3% upside to N140.40 reference price.
Since then, the company share price has maintained downward trend, reflecting investors’ negative perception amidst Holcim decision to sell down interest in the group. “A key driver of WAPCO’s impressive performance, particularly in Q2’25, was the favourable pricing environment that supported its cement and construction solutions.
This price support drove average revenue per tonne to N171,866 in Q2’25 and N162,265 over H1’25 while analysts at CardinalStone Securities projected revenue per tonne to remain elevated with a mean of N167,968 for 2025.
Analysts said the transfer of the majority shareholding to Huaxin Cement remains an upside risk and a medium-term catalyst. Meanwhile, the market continues to keep tab on legal action brought by Strategic Consultancy Limited, a minority shareholder in Lafarge Africa.
The suit challenges the secretive sale of Holcim’s majority stake in Lafarge Africa to a Chinese firm, Huaxin Cement, alleging a violation of Nigerian corporate law and the right of first refusal for local shareholders.
The controversy erupted after Strategic Consultancy claimed it only became aware of the transaction when significant steps had already been taken toward its conclusion. The firm has since accused Lafarge and its majority foreign shareholders of breaching Nigerian laws intended to protect local investors and ensure transparency in transactions involving foreign entities.
In June, A Federal High Court in Lagos ordered all parties involved in the ongoing legal dispute over the sale of Lafarge Africa Plc. to Chinese firm Huaxin Cement Ltd. to maintain the status quo pending the outcome of an appeal.
Justice Lewis Allagoa gave the order following a notice of appeal filed by Lafarge Africa Plc. Challenging the court’s earlier ruling that dismissed its objection to the court’s jurisdiction.
Deal Closed
Last week, Holcim announced it has completed the divestment of its Nigeria business, selling its entire 83.81% shareholding in Lafarge Africa PLC to Huaxin Cement at an equity value of USD 1 billion on a 100% basis before dividend adjustments.
In a supporting statement, Martin Kriegner, Regional Head Asia, Middle East & Africa said, “We are pleased to have found in Huaxin Cement a trusted buyer that is committed to further developing the business in Nigeria.
“At the same time, the sale proceeds give Holcim additional capacity for our growth-focused capital allocation. We wish Lafarge Africa PLC and Huaxin Cement continued success.” #Lafarge Africa Shrinks Amidst Legal Tussle Naira Touches N1,522 Briefly after CBN FX Interventions
