Shareholders in Lafarge Wapco , the Nigerian unit of French cement maker Lafarge , on Wednesday approved a $1.35-billion deal combining its Nigerian businesses with Lafarge's wholly-owned South African subsidiary.

Olusegun Osunkeye, chairman of Lafarge Wapco told shareholders at a meeting the Nigerian cement firm would pay the Lafarge group $200-million in cash and 1.4-billion in new shares to buy Lafarge's South African unit and other of its Nigerian businesses in order to combine them.

After the merger, the new combined entity will be renamed Lafarge Africa and listed on the Nigerian bourse with a market capitalisation of around $3-billion. Lafarge group will own 73% of the combined entity.

Lafarge Wapco also won shareholder approval to raise 100-billion naira in debt or equity on domestic or international capital markets.

Analysts at Renaissance Capital maintained its buy recommendation on Lafarge Wapco but said the deal could dilute existing shareholders and maintained its target price of 130 naira per share on the stock. Lafarge Wapco traded at 112.07 naira on Wednesday, up 1.71%.

"We believe that ... there are attractive assets in the mix, pricing is a real issue and some of the assets involved would dilute shareholder value," Renaissance Capital said in a note.

"We favour the acquisitions of Unicem and Ashaka Cement, but take a negative view on the inclusion of Atlas Cement and Lafarge South Africa at the indicated price."

Lafarge owns 60 percent of Lafarge Wapco, its listed subsidiary in Nigeria, 58.6 percent of another Nigerian listed company Ashaka Cement Plc, and 100 percent of the Atlas cement company. It has joint ownership with Holcim of privately held United Cement Company of Nigeria. It owns 100 percent of the Lafarge South African business.

The consolidation will enable Lafarge to accelerate growth on the African continent and expand its product offering in South Africa and across the region, the cement maker has said as a reason for the merging both businesses.

Lafarge faces intense competition in Africa, especially from arch rival Dangote Cement, owned by Africa's richest man, Aliko Dangote. The company, Nigeria's biggest with a market capitalisation of around $24-billion, is set to roll out cement plants across Africa.

The deal is expected to close in the second half of the year. It now needs regulatory approval.

Also shareholders on Wednesday approved an increase in dividend payment to 3.30 naira per share for the 2013 financial year, up from 1.20 naira paid in 2012.