Home » Investors looking to acquire Aliko Dangote’s cement firm must make at least $13-billion offer

Investors looking to acquire Aliko Dangote’s cement firm must make at least $13-billion offer

by Omokolade Ajayi

After the board of the U.S. microblogging and social networking service Twitter accepted Tesla CEO Elon Musk’s $44-billion offer to acquire Twitter and take it private, there has been speculation among investors about how much it will take to acquire top African companies.

One of the companies at the center of this discussion on the valuation of leading companies owned by African billionaires around the world is Dangote Cement Plc, a Nigeria-based pan-African cement company founded by Africa’s richest man Aliko Dangote, who ranks as the world’s 66th richest man.

The acquisition of Africa’s largest cement company, Dangote Cement, from Africa’s wealthiest man is not a near-impossible task, given that he sold his flour milling business, Dangote Flour Mills Plc, to Crown Flour Mills Limited, a subsidiary of Singapore-based Olam International in a $332-million deal in 2019.

According to Billionaires.Africa research, potential investors should be prepared to offer at least $13.1 billion to get the attention of the Nigerian billionaire, who recently launched his $2.5-billion fertilizer complex in Lagos. This represents a 10-percent premium over Dangote Cement’s current market capitalization on the Nigerian Exchange of N4.93 trillion ($11.9 billion).

The premium reflects the growth potential of the leading cement company, whose revenue has more than doubled in value from N615.1 billion ($1.95 billion) in 2016 to N1.38 trillion ($3.32 billion) in 2021. (Depreciation in the value of naira was accounted for in the currency conversion).

Dangote Cement’s profit after tax has increased from N142.86 billion ($453.8 million) in 2016 to N364.44 billion ($877.7 million) in 2021, while its share price and market capitalization on the Nigerian Exchange have increased from N180 ($0.572) per share to N292.4 ($0.704) and N3.93 trillion ($11.9 billion), respectively.

The leading cement company increased its profit from N89.71 billion ($216.1 million) in the first quarter of 2021 to N105.9 billion ($255.1 million) in the first quarter of 2022, driven by a 24.2-percent increase in revenue.

Dangote’s net worth has increased by $1.61 billion to $20.7 billion since the start of 2022, owing to a rise in the market value of his cement company’s majority 86-percent stake. His stake in Dangote Cement is now worth $10.3 billion.

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