Investment Corporation of Dubai (ICD), an investment vehicle for Dubai’s sovereign wealth, has acquiring a 1.4% stake in Dangote Cement, Nigeria’s largest traded company by market capitalisation and the largest cement manufacturer on the continent, at a cost of $300m.
ICD agreed to purchase the minority interest in Dangote Cement from majority shareholder, Dangote Industries, both of which form part of the Dangote Group, a diversified Nigerian conglomerate founded by Aliko Dangote, a businessman known as Africa’s richest man.
The deal was signed in a ceremony conducted between by HE Mohammed Ibrahim Al Shaibani, ICD’s executive director, and Aliko Dangote, president of Dangote Industries.
“Our products may be simple bags of cement, but millions of Africans will use them to build a continent that is rich in opportunities for entrepreneurs and investors, and we welcome the ICD to our growing list of international, blue-chip shareholders,” delivered Dangote.
“They share our vision of Africa that will grow to become an economic powerhouse in the coming decades as its people rise to become prosperous members of the global economy.”
ICD’s Al Shaibani commented: “Sub-Saharan Africa and Nigeria provide fantastic long-term investment opportunities. Dangote Cement is a highly profitable and capitalised organisation that is well positioned to access and act on growth opportunities across the continent.”
Dangote Cement has achieved significant revenue growth in recent years, with its market capitalization on the Nigerian stock exchange rising from $15bn in 2013 to $18.76bn today, on par with industry heavyweights such as Anhui and CRH and closing on Lafarge-Holcim.
Dangote Cement also has ambitious expansion plans to grow its capacity across the continent from its current level of around 35 million tonnes annually to more than 60 million tonnes annually by 2018, in order to capitalise on the anticipated long-term structural economic growth.
Domestically this will allow the company to maintain its dominant 62% market share as the Nigerian economy follows its projected 6.6%-7.3% annual growth in GDP from 2014 to 2018.
Earlier in the year, the Dangote Group announced a partnership with the Islamic Development Bank (IDB) to boost job creation in Africa, following a meeting between Aliko Dangote and Dr Ahmad Mohamed Ali, IDB president, at the IDB headquarters in Jeddah.