AfriSam to appoint new CEO to accelerate merger with PPC
AfriSam is set to replace its CEO to help pave the way towards a merger with listed rival PPC, according to three people who asked not to be identified as the information is private..
Stephan Olivier’s departure from the cement company after almost seven years at the helm could be announced as soon as Friday, they said.
He would be replaced on a short-term contract by Rob Wessels, a former chief investment officer at AfriSam’s black empowerment partner Phembani Group, leaving PPC CEO Darryll Castle as the prime candidate to take control of the combined entity.
The new management team would be expected to secure a tie-up with PPC, possibly through a reverse of AfriSam into its competitor’s listing.
Phembani, co-founded by MTN chairman Phuthuma Nhleko, would own a significant stake in the combined company alongside the Public Investment Corporation (PIC), Africa’s largest money manager and AfriSam’s biggest shareholder.
“Finer details such as executive changes and possible asset sales have not yet been defined,” Olivier said in e-mailed comments on Thursday.
“The proposed transaction will enhance the goals of achieving greater levels of black industrialisation in SA.”
“PPC is not in a position to comment on the executive structure of the merged entity should the merger proceed,” said Siobhan McCarthy, PPC’s general manager of communication. An assessment of the potential merger “is expected to take up to six months and the outcome will be communicated on completion.”
Empowerment groups such as Phembani help South African companies comply with government initiatives to boost black involvement in the economy. A spokesperson for the business declined to comment.
PPC and AfriSam said in February they had revived talks to merge two years after abandoning an initial attempt.
Both companies have battled depressed prices in their home market, while PPC is expanding in sub-Saharan Africa with new plants in countries including Zimbabwe, Democratic Republic of Congo and Ethiopia.While new cement makers have made the South African market more competitive, PPC and AfriSam would consider the sale of operations in cities such as Port Elizabeth, Bloemfontein and Kimberley to dispel antitrust concerns.
“Should the proposed merger proceed it will result in the creation of a South African-owned cement producer that is financially stronger, operationally more efficient, has deeper technical capability and is well placed to develop as a major African cement producer,” McCarthy said.