By Alex MacDonald
LONDON--Shareholders in Pembani Group and Shanduka Group have
signed an agreement to create a new 9 billion rand ($744 million)
black-controlled company called Pan African Industrial holdings
Group operating in the natural resources, infrastructure and
industrial sectors, the companies said in a statement.
This follows announcements in May and November last year of the
intention to create the so-called black economic empowerment firm
following the planned exit of business tycoon Cyril Ramaphosa from
Shankduka. Mr. Ramaphosa founded Shanduka in 2001 and built the
company into a group with diverse investments, ranging from mines
to fast food chains. However, he decided to exit his stake in
Shanduka in order to a avoid conflict of interest after securing a
post as South Africa's deputy president in May last year.
The newly merged group will have even more scale and liquidity
to pursue investment opportunities. It will also be compliant with
South Africa's black economic empowerment legislation, which aims
to improve the socioeconomic standing of the country's majority
black population by setting benchmarks for companies such as black
ownership targets, skills training and development in poor
communities.
The transaction is still subject to regulatory review but if
completed the merger would create an investment vehicle with stakes
in a diverse portfolio of assets including oil firm Engen, cement
company AfriSam, natural resources firm Shanduka Resources, as well
as financial services firms Standard Bank Group Ltd. (SBK.JO) and
Liberty Group.
The group will be chaired by Phuthuma Nhleko, co-founder and
chairman of Pembani and chairman of South Africa's
telecommunications company MTN Group. Major shareholders would
include Standard Bank Ltd. and Jadeite Ltd., a unit of state-owned
China Investment Corporation.
Write to Alex MacDonald at alex.macdonald@wsj.com