Two cash payments of $8.8bn and $4.1bn will be made in January and March 2008 respectively.
OCI’s board will return $1.1bn to shareholders in the form of two extraordinary dividends in the first quarter of 2008.
The company will retain the balance of Lafarge’s cash payment to finance new investment and expansion.
As part of the deal, NNS Holding, a holding company controlled by Nassef Sawiris, chief executive officer of OCI , will buy 22.5 million new Lafarge shares for $184 a share.
NNS will hold an 11.4 per cent stake in the enlarged share capital of Lafarge. This will allow NNS to appoint two nominees to the board of Lafarge, one of whom will be Sawiris.
“The price Lafarge paid was fair,” says Roddi el-Helw, man-aging director at Egypt’s Beltone Financial.
“It is a brilliant move by OCI to protect itself from a downturn in the cement industry cycle.
“Cement is a cyclical industry and one day prices will fall.”
Cement capacity in the region is expected to increase significantly in the next three to five years.
Lafarge’s acquisition forms part of the continuing consolidation of the global cement industry.
Sawiris has indicated that the remaining part of OCI, the construction arm and infrastructure developer, will remain listed on the Egyptian and London stock exchanges.