‘Our combination will create a formidable paints and coating company’ — Portland Paints announces merger with CAP

Portland Paints Nigeria has announced its decision to merge with Chemical and Allied Products (CAP).

In a statement on Monday, both companies said the proposed merger will help to drive growth and expansion within the Nigerian and African markets.

With CAP emerging as the resultant entity, all of Portland Paints’ assets, liabilities and business undertakings including real property and intellectual property rights would be transferred to CAP.

“We believe that the proposed merger will provide our customers access to a broader product portfolio and a wider range of value options to meet their needs,” the statement read.

“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.”

CAP has offered 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 percent premium to the last traded share price of Portland Paints on October 16, 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% premium on the trading price as at close of trading on October 23.

David Wright, managing director of CAP, said the enlarged company will feature a broader decorative paint portfolio covering the premium, mid-market and affordable segments and the inclusion of marine and protective coatings.

He added that stakeholders, from shareholders to customers as well as the broader economy will benefit from the proposed merger.

Bolarin Okunowo, managing director of Portland Paints, said: “In recent months, the board and management of Portland Paints have evaluated various strategic options with a view to positioning our company to capture emerging growth opportunities. 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.”