Tanzanian conglomerate Amsons Group has been making headlines after it revealed its plans to acquire a 100% stake in Kenya’s Bamburi Cement PLC. Amsons, through its Kenyan subsidiary Amsons Industries (K) Ltd, issued a notice of intention to launch a public takeover of Bamburi for a record $180 million.
The company said it would buy Bamburi’s shares at 65 Kenyan shillings per share, a premium offer above the Bamburi Cement share price of KES 45 per share as of the closing of trade at the Nairobi Securities Exchange (NSE) on July 09, 2024.
Amsons Group Managing Director, Edha Nahdi, said the proposed cross-border acquisition will deepen the group’s position in the cement sector in East Africa and is part of its broader regional expansion plans.
“Amsons Industries (T) Ltd is a quality cement products manufacturer in Tanzania under the brand names ‘Camel Cement’ and ‘Tembo Cement,’ two household brands in the Tanzanian construction market. Our offer to acquire shares in Bamburi is part of our corporate market expansion plan and will mark the formal entry of Amsons Group into the Kenyan market, where we plan to make investments in other industries in the coming months,”
Nahdi said.
The takeover follows a similar acquisition, where Amsons acquired 65% of Holcim’s participation in Tanzania’s Mbeya Cement Company Ltd.
Amsons Group owners and growth history
Amsons Group is a family-run conglomerate. It is owned by the family of Abdalla Nahdi and managed by Edha Nahdi as the Managing Director. It operates in several African countries, including Tanzania, where it is headquartered, Zambia, Malawi, Burundi, Mozambique, the Democratic Republic of Congo, and if the Bamburi acquisition goes as planned, Kenya.
The company was founded in 2006 and started as an importer of bulk oil and petroleum products. Despite being fairly young compared to other companies of the same nature, Amsons Group has grown into a billion-dollar multinational company with a diversified portfolio spanning various industries, including cement manufacturing, fuel and lubricant distribution, premix concrete production, and real estate.
From a focus on importation, the company’s interests have shifted to manufacturing for import substitution. One of the Group’s main affiliates is the fuel and distribution company Camel Oil Tanzania, which has a 60,000 cubic meter storage facility in Dar es Salaam. The company exports and sells several petroleum products to African countries, including Kenya, Uganda, Malawi, and Zambia.
Amsons Group, through Amsons Industries, has a 6,000 metric ton per day cement manufacturing capability. In addition, the conglomerate has a 500 metric ton per day wheat flour milling plant, a state-of-the-art premix concrete plant, inland container depots (ICDs), fuel and lubricants, liquefied petroleum gas (LPG), and an 800-truck transportation fleet across Zambia, Malawi, Mozambique, Democratic Republic of Congo, Burundi, and Tanzania.
The company also owns Tanzania Clou Electronics Company Limited and Amsons Real Estate. So far, Amsons Group has created over 4,000 employment opportunities across four countries.
What are the implications of the Bamburi Cement takeover?
The proposed acquisition of Bamburi Cement by Amsons Group could have several implications for Kenya and East Africa’s cement sector. Acquiring Bamburi will make Amsons a leading, if not the leading, cement producer and distributor in East Africa.
Further, the entry of the conglomerate into Kenya will mean increased competition for key players in the cement sector and will change market dynamics, perhaps in terms of pricing.
The acquisition will also create operational synergies, such as shared logistics and distribution networks, enhancing efficiency and reducing costs for both Amsons and Bamburi.
Since Amsons operates in several countries outside Kenya, the acquisition could significantly increase Bamburi’s reach in the region.
The conglomerate indicated plans to invest in other industries within Kenya; as such, this acquisition has the potential to boost Kenya’s economy and spur investments in related sectors like construction and infrastructure.
