Just What Is This Transcorp, Anyway?

Shares of Transcorp Nigeria are set to hit the Nigerian Stock Exchange this Thursday. There will be 18.5 billion shares on offer at N6 per share ($0.045) – a stake of $835 million.

This is an enormous addition to the market, representing 2.7% of the exchange’s total capitalization.

But just what is this Transcorp exactly?

Well, it is Nigeria’s first mega-conglomerate. But unlike most conglomerates that start small and grow over a long period through mergers and acquisitions, Transcorp started big with loads of capital and the intention to invest it in a wide array of industries. It did this by recruiting investments from of Nigeria’s wealthiest citizens, including Aliko Dangote, founder of the Dangote Sugar Refinery. Its war chest grew further through a private placement that targeted Nigerians both at home and in the diaspora.

Transcorp’s goals are in equal parts profit and national development. Right from the start, it is meant to be a global player – a company with the financial muscle to invest wherever and whenever it sees an opportunity.

One of its first investments was a controlling stake in the privatized national telecom, Nitel and its mobile arm, Mtel. It followed that with the purchase of the Abuja Hilton. It plans further investments in the oil and gas industry, agriculture, power plants, and an IT free trade zone.

This is an experiment worth watching. Will Transcorp succeed in harnessing its massive assets for the good of Nigeria like the Japanese and South Korean conglomerates it emulates? Or will it prove unwieldy and stifling to the economy? Either way, valuable lessons are in the offing.