Whale Rock Cement has proposed the acquisition of Schwenk Namibia, which holds a majority stake in Ohorongo Cement. If approved by the Namibian Competition Commission, this acquisition would enable Whale Rock Cement to completely control cement production in Namibia. The company has previously demonstrated confidence in Namibia’s regulatory framework despite past acquisition attempts by Asian companies failing. The NCC is accepting public feedback on the proposed deal.
Whale Rock Cement, the parent company of Cheetah Cement, has submitted a notice to the Namibian Competition Commission for the acquisition of Schwenk Namibia, which owns a majority share in Ohorongo Cement. If authorized, this acquisition will confer upon Whale Rock Cement full control of cement production within Namibia. The transaction involves Whale Rock purchasing all issued shares of Schwenk Namibia from SCHWENK Zement International GmbH & Co. KG.
Currently, Schwenk Namibia possesses a 69.83% interest in Ohorongo Cement, while the remaining shares are divided among the Industrial Corporation South Africa (14.27%), the Development Bank of Namibia (11.73%), and the Development Bank of Southern Africa (4.17%). Ohorongo Cement, founded by the Schwenk Group in 2007, began operations in December 2010, producing cement under its brand and emphasizing alternative energy sourcing.
Ohorongo Cement also operates a subsidiary, Energy for Future (Pty) Ltd, which aims to combat scrub encroachment on farmland by converting biomass into energy for its facility. Last week, Whale Rock Cement expressed its confidence in Namibia’s regulatory landscape, stating, “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 launched its cement factory close to Otjiwarongo in April 2018. This acquisition attempt is not the first by an Asian corporation targeting Ohorongo Cement. In 2019, International Cement Group Limited, based in Singapore, sought to acquire Ohorongo Cement for N$1.5 billion, but the deal fell through. Additionally, a 2020 merger proposal between Schwenk Namibia and West China Cement was blocked due to potential collusion concerns, specifically regarding the two dominant cement entities at the time, Ohorongo Cement and Cheetah Cement.
Furthermore, in 2024, a merger between Schwenk and RWCo GmbH received approval under conditions meant to encourage local ownership but was later abandoned because of challenging requirements. Currently, the NCC is soliciting public opinion on the proposed acquisition to assess its impact on fair competition. Stakeholders wishing to share their views regarding this transaction are encouraged to submit feedback via the NCC website, with assurance of confidentiality in the review process.
In summary, Whale Rock Cement’s initiative to acquire Schwenk Namibia could potentially consolidate its influence over Namibia’s cement production landscape. Following past failed attempts by Asian firms to acquire Ohorongo Cement, the Namibian Competition Commission’s involvement is crucial for maintaining fair market competition. Stakeholders have the opportunity to voice their concerns, ensuring a transparent regulatory process.
Original Source: www.observer24.com.na
