Whale Rock Cement plans to acquire Schwenk Namibia, the majority owner of Ohorongo Cement. The transaction, filed with the Namibian Competition Commission, could lead to Whale Rock dominating Namibia’s cement sector. Stakeholders are encouraged to provide feedback about the acquisition, which reflects Whale Rock’s commitment to investing in the Namibian economy.
Whale Rock Cement, which controls Cheetah Cement, has signaled its intention to acquire Schwenk Namibia, the majority stakeholder in Ohorongo Cement. This acquisition notice was filed with the Namibian Competition Commission (NCC) on 17 February, and if sanctioned, it would empower Whale Rock Cement with complete oversight of cement production in Namibia.
The proposed transaction entails Whale Rock Cement buying the entire issue share capital of Schwenk Namibia from SCHWENK Zement International GmbH & Co. KG. Presently, Schwenk Namibia possesses a 69.83% stake in Ohorongo Cement, while the remainder is distributed among various stakeholders, including Industrial Corporation South Africa (14.27%), Development Bank of Namibia (11.73%), and Development Bank of Southern Africa (4.17%). Ohorongo Cement commenced its operations in December 2010, having been established by the Schwenk Group in 2007.
Ohorongo Cement not only produces cement under its brand but also emphasizes securing alternative energy sources. Its subsidiary, Energy for Future (Pty) Ltd, actively engages in initiatives that mitigate scrub encroachment on farms by converting biomass into energy for its cement operations. Last week, Whale Rock Cement expressed confidence in Namibia’s regulatory environment, highlighting their commitment to the country’s investment prospects.
They stated, “The fact that we decided to open our factory in Namibia is a demonstration of the confidence we have in the country and its regulatory framework. We believe Namibia stands heads above many African countries as far as offering an environment conducive for investment.” Whale Rock’s cement factory, located near Otjiwarongo, commenced production in April 2018.
Notably, this is not the first effort by a foreign entity to acquire Ohorongo Cement. In 2019, a proposed N$1.5 billion acquisition by Singapore-listed International Cement Group Limited failed to materialize. Previous attempts, including a 2020 merger proposal between Schwenk Namibia and West China Cement, encountered opposition due to concerns regarding collusion between the primary cement producers. A conditional merger in 2024 between Schwenk and RWCo GmbH was also abandoned due to unreasonable requirements.
The NCC has invited public feedback on the proposed transaction as part of its commitment to ensuring fair competition. Stakeholders are encouraged to submit their comments on the NCC website, providing a concise description of their concerns, alongside any pertinent documentation for confidential review.
The potential acquisition of Schwenk Namibia by Whale Rock Cement signifies a significant move towards consolidating control of Namibia’s cement industry. This transaction, if approved by the Namibian Competition Commission, could reshape the competitive landscape while reinforcing Whale Rock’s investment confidence in the country. Stakeholders have the opportunity to voice their opinions, ensuring an open dialogue as the process unfolds.
Original Source: www.observer24.com.na
