(Corrects paragraph 2 to make clear Lafarge group is being paid by Lafarge Wapco, not the other way round, and is receiving new shares, not issuing them)
* Merger to enable Lafarge to grow in Africa
* To cross sell products across the African continent
* $1.35 bln merger deal to close H2, subject to approvals
By Chijioke Ohuocha
LAGOS, June 3 (Reuters) - French cement maker Lafarge will combine its South Africa business with publicly traded Nigerian unit Lafarge Wapco, listing its Africa interests together on the Lagos bourse, its country chief executive officer said on Tuesday.
Guillaume Roux said the deal, worth $1.35 billion, will see the Lafarge group get $200 million in cash and 1.40 billion new shares in Lafarge Wapco to effect the merger.
The new company Lafarge Africa Plc will have a market capitalisation of over $3 billion listed on the Nigerian Stock Exchange, Roux told a news conference. Lafarge group will own 73 percent of the combined entity.
The combined company would seek to boost capacity by 5.5 million tonnes to 17.5 million tonnes after the merger.
"The consolidation will enable the enlarged entity to accelerate growth on the continent and expand its product offering in South Africa across the region," Roux said.
He said Standard Chartered Bank and Nigerian-based investment bank Chapel Hill Denham was advising it on the merger. He said Lafarge Africa will become the sixth most capitalised company on the Nigerian bourse.
Lafarge faces intense competition in Africa, especially from its arch rival Dangote Cement, owned by Africa's richest man Aliko Dangote. The firm, Nigeria's biggest with a market capitalisation of around $24 billion, is set to roll out cement plants across Africa.
The combined entity accounted for $1.25 billion in 2013 annual sales and earnings before interest, tax, depreciation and amortisation(EBITDA) stood at $345 million.
Lafarge owns 60 percent in Lafarge Wapco, its listed subsidiary in Nigeria, 58.6 percent in another Nigerian listed firm Ashaka Cement Plc, and 100 percent equity holding in Atlas cement company limited. It shares joint ownership with Holcim of privately-held United Cement Company of Nigeria. It owns 100 percent of the Lafarge South African business.
Roux said he expected the deal, which is still subject to shareholders' and regulatory approvals, to close in the second half of the year.
Shares in Lafarge Wapco, closed flat at 113 naira per share valuing it at 337.6 billion naira while Ashaka Cement gained the maximum 10 percent allowed to 25.99 naira. (Editing by Tim Cocks, William Hardy and Kevin Liffey)