City Cement to Acquire Umm Al Qura Stake Through Capital Increase
In a strategic move to expand its foothold in the Saudi cement industry, City Cement Company has announced plans to acquire the entire stake of Umm Al Qura Cement Company through a capital increase. This acquisition is part of an agreement that will see City Cement issue new shares to acquire all outstanding shares of Umm Al Qura Cement.
This acquisition follows the announcement of a share-swap deal in October 2024. Under the terms of this deal, shareholders of Umm Al Qura Cement will receive newly issued shares in City Cement. As a result, Umm Al Qura’s shareholders will collectively own 30.4% of City Cement’s total capital after the capital increase. The move marks a significant step in City Cement’s expansion strategy, solidifying its position within the Saudi cement market. The transaction will be executed in compliance with the regulations outlined by the Capital Market Authority (CMA) of Saudi Arabia, specifically adhering to the Merger and Acquisition Regulations and the Rules on the Offer of Securities and Continuing Obligations.
Notably, the deal involves a related party, Al Abdullatif Holding Group Company, which holds a substantial stake in both companies. Al Abdullatif currently owns 24.53% of City Cement and 8.7% of Umm Al Qura Cement. The involvement of a related party adds an additional layer of scrutiny to the deal, which will be evaluated by relevant regulatory bodies. Once the necessary regulatory approvals are secured, City Cement will issue a shareholders’ circular, providing further details on the capital increase, including any associated risks and other important information for investors. This circular will serve as an important document for stakeholders as the company moves forward with the transaction. The acquisition is seen as a positive development for City Cement, helping to strengthen its position in a competitive market while enhancing its overall production capacity. However, analysts will be closely watching the integration process and the impact of the capital increase on City Cement’s stock performance in the coming months.
