Dipo Olowookere
By Dipo Olowookere
Two leading paint makers in Nigeria, Chemical and Allied Products (CAP) Plc and Portland Paints and Products Nigeria Plc are planning to merge their respective businesses into a single entity.
The new company after the completion of the deal will be CAP and the transaction is expected to deliver an accretive value to shareholders of both companies, Business Post gathered.
In a notice to the Nigerian Stock Exchange (NSE) on Monday, it was disclosed that CAP is offering shareholders of Portland Paints a choice to receive N2.90 for each share of the firm in their portfolio or one new ordinary share of CAP for every eight shares of Portland Paint held by them.
The proposed consideration represents a 45 per cent premium to the last traded share price of Portland Paints on October 16, 2020, being the last business day prior to the date on which CAP sent its merger proposal to the board of Portland Paints and a 41 per cent premium on the trading price as at close of trading on October 23, 2020.
The respective boards of CAP and Portland Paints said this merger was driven by the strategic objectives of both firms to drive growth and expansion within the Nigerian and African markets.
They further expressed a strong confidence that this deal will provide a unique opportunity to change the Nigerian paints and coatings landscape.
CAP and Portland Paints play in distinct segments, and the enlarged CAP will have a broader portfolio covering the top-end/premium decorative segment, the mid-market decorative segments as well as the industrial segment (in particular marine and protective coatings).
“We believe that the proposed merger will provide our customers with access to a broader product portfolio and a wider range of value options to meet their needs.
“The combination of CAP and Portland Paints will create a formidable paints and coatings company that will be strategically positioned across segments as a result of its combined brand portfolio (Dulux, Sandtex, Caplux and Hempel); its diversified product ranges spanning decorative and industrial with widespread distribution channels and retail footprint in Nigeria,” they both said.
“I am excited by the prospect of an enlarged company with a broader decorative paint portfolio covering the premium, mid-market and affordable segments and the inclusion of marine and protective coatings, all of which will benefit our customers and shareholders,” the Managing Director of CAP, Mr David Wright, said.
“CAP’s business is complementary to ours, and both companies will be better able to serve our respective customers by coming together. I believe the combination of Portland Paints and CAP will yield significant benefits for all of our stakeholders,” the MD of Portland Paints, Bolarin Okunowo, stated.
