The Cement Company of Northern Nigeria (CCNN) and Obu Cement Company plc, on Wednesday merged to become Obu Cement plc.
In a meeting involving the shareholders of both companies, which was ordered by a court, they agreed that the entire issued share capital of CCNN comprising 13,143,500,966 ordinary shares of 50 kobo each be cancelled and CCNN be dissolved without being wound up.
By Wednesday’s pronouncement, all the assets, liabilities, licences and undertakings of CCNN, including employees, real property and intellectual property right belongs to Obu Cement.
Speaking to shareholders before they voted, Chairman of the Board of Directors of Obu Cement Company, Chimaobi Madukwe said that the merger would boost its capacity to expand new and existing markets.
He said: “The merger will increase the production capacity of the enlarged company to 8 million tonnes per annum. We expect the proposed merger to provide opportunities for significant cost-savings and improved operational efficiencies by streamlining operations and optimizing use of combined resources. The proposed merger will provide an opportunity for the enlarged company to benefit from economies of scale in manufacturing, procurement and distribution.”
Earlier, the chairman of the board of Directors of Cement Company of Northern Nigeria (CCNN), Alhaji Abdulsamad Rabiu said the merger was in the best interest of the company.
When the merger comes into effect, each CCNN shareholder will receive one scheme share for every one ordinary share held in CCNN.
CCNN and Obu Cement shareholders, according to Rabiu, will own 38.81 per cent and 61.19 per cent of the enlarged company’s issued share capital respectively, upon implementation of the merger.
For his part, the Chief Executive, Stanbic IBTC Capital Limited, Funso Akere, assured shareholders that implementation of the M&A would not give rise to capital gains tax as section 32 of the Capital Gains Tax Act specifically exempts any gains made as a result of a takeover, merger of absorption in which one of the entities loses its identity, provided no cash payment is made in respect of the shares acquired.
Obu Cement is now constrained to allot an aggregate of 20,720,853,094 ordinary shares to qualifying Obu Cement shareholders in the ratio of 518 reconstructed Obu Cement share for every one Obu Cement share held.