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Dangote Cement Shares Rise 17% After Poaching Lafarge CEO

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Shares of Dangote Cement Plc have appreciated by at least 17 percent two weeks after it announced appointing erstwhile Managing Director/CEO of its key competitor, Lafarge Africa Plc, Mr Michel Puchercos, as its new GMD/CEO.

In a notice dated December 24, 2019, Dangote Cement said Mr Puchercos was joining the company after resigning his position at Lafarge Africa. The Frenchman picked to replace Mr Joseph Mokoju, who retires January 31, 2020.

Market observers saw this development as a master stroke and a huge blow on Lafarge Africa, which was beginning to stand on its feet after the appointment of Mr Puchercos.

An analysis done by Business Post showed that two weeks after the announcement, Dangote Cement has come out better in terms of performance at the stock market, where both companies trade their shares.

For Dangote Cement, which is owned by Africa’s richest man, Mr Aliko Dangote, its shares have risen 17.14 percent to N164 per unit as at the close of business on Wednesday, January 8, 2020 from N140 per unit it traded when the news was announced last month.

On the part of Lafarge Africa, its shares have managed a growth of 6.07 percent, which is less than half of the price increase recorded by its rival, closing at N14.85 per share yesterday against N14 per share it ended on Tuesday, December 24, 2019.

Some analysts have predicted the movement of Mr Puchercos from Lafarge Africa to Dangote Cement would give the latter an edge at both the stock market and on the field.

They argued that the Frenchman knows the key trade secrets of his former employers and could possibly use it to the advantage of his ‘new home’ at the detriment of Lafarge Africa.

In fact, it has been stressed that one of the first assignment of Mr Puchercos when he resumes at Dangote Cement on February 1, 2020 would likely be to woo major distributors of Lafarge Africa in order to cripple the competitor’s market share.

If this happens, shareholders of Lafarge Africa will continue to lose because both the topline and bottomline of the company will be badly affected. But for now, observers will continue to watch as events unfold.

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