City Cement confirms plans to acquire Umm Al-Qura Cement

Logos of City Cement Co. (CCC) and Umm Al-Qura Cement Co. (UACC)

City Cement Co. (CCC) confirmed plans to fully acquire Umm Al-Qura Cement Co. (UACC), according to a Tadawul statement today, Feb. 25.  

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This comes in accordance with the terms and conditions of the implementing agreement, and Article 17(e) of the merger and acquisition regulations.

As part of the declaration of intent, CCC confirmed that it does not own any shares directly or indirectly in UACC, adding that there is no person acting in agreement with CCC in relation to the transaction.

CCC does not own any option to purchase UACC shares, nor does any person acting in agreement with it. Further, CCC has not received any irrevocable commitment from any party to vote in favor of the transaction at the relevant extraordinary general assembly. There are no indemnity arrangements in relation to the shares of UACC involving CCC, UACC or any person acting in concert with them.

CCC's financial adviser Al Rajhi Capital is not required to provide confirmation that CCC has sufficient resources to satisfy the completion of the transaction, given that the consideration payable by CCC does not include a cash component.

The resources required for the transaction include issuance of the consideration shares, with no cash component. Al Rajhi Capital confirmed that CCC satisfied all conditions required for the registration and offer of the consideration shares.

CCC also met conditions for the listing of the consideration shares, except for approvals of the Capital Market Authority (CMA), the Saudi Exchange, and shareholders.

On Dec. 30, 2024, a no-objection was obtained from the General Authority for Competition to complete the economic concentration resulting from the transaction.

CCC and UACC continue to work on satisfying the conditions required to complete the merger, including obtaining the relevant regulatory approvals. Completion of the transaction is not yet certain and remains subject to all conditions referred to in the transaction announcement and recent developments announcement, the statement noted.

After obtaining the necessary regulatory approvals, CCC will issue a circular to its shareholders with all the details related to the capital increase. CCC will also publish an offer document to UACC shareholders, which will set out specific information relating to the transaction.

UACC’s board of directors will also issue a circular to its shareholders setting out its views in relation to the transaction.

CCC and UACC agreed to arrange shareholder meetings to vote on the transaction.

CCC will make further announcements as and when material developments occur in relation to the transaction. On Oct. 24, 2024, UACC and CCC signed a share-swap agreement, under which the latter will offer to acquire all UACC shares in exchange for newly issued shares in CCC.

The deal shall be conducted in accordance with the CMA’s Article 26 of the Merger and Acquisition Regulations and the Rules on the Offer of Securities and Continuing Obligations. It shall also comply with the terms and conditions stipulated under the agreement.

The table below highlights the merger details: