On October 23, Swiss firm Holcim, the majority shareholder in Kenya’s Bamburi Cement, terminated the irrevocable sale agreement from Tanzania’s Amsons Group, paving the way for a counteroffer from Savannah Clinker. At the same time, Savannah, owned by Benson Ndeta, increased its offer from KES70 to KES76.
Amsons first offered to buy Bamburi and delist it from the Nairobi Securities Exchange (NSE) in July. A month later, Savannah Clinker gave a higher offer price, coming days after Holcim had accepted Amsons’ buyout bid. The Tanzanian conglomerate–interested in cement, bulk grain, real estate, and energy–offered to buy the cement maker at KS65 per share, a premium above the company’s share price.
With the termination of the sale agreement, the deal could go in Savannah’s favour. Ndeta is linked to the troubled Savannah Cement, which went into administration recently after failing to meet its debt obligations. He indicated in August that he was in the process of stepping down as a director of the troubled cement maker. However, Savannah Clinker and Savannah Cement are two different entities.
Amsons still seems keen on the deal despite the new development. The Tanzanian company is eager to enter the lucrative Kenyan market through the takeover. On Friday, the company started a campaign to get the support of Bamburi’s majority and minority shareholders to get the deal on track.
Bamburi has a 35% market share, making it Kenya’s single largest cement manufacturer. The acquisition could put Amsons ahead of local competitors, including Mombasa Cement, National Cement and state-owned East African Portland Cement Company (EAPCC).
Race to save the deal
Amsons bid to acquire up to 100% of Bamburi Cement is backed by KCB Bank and secured by a $5.3 million break fee held in escrow at Absa Kenya. Through its Kenyan subsidiary, Amsons Industries (K) Ltd, the Tanzanian conglomerate has committed to investing over $180 million (KES23.5 billion), offering KES65 per share—a 42.4% premium to Bamburi’s market closing price on the Reference Date and a 52.94% premium on the 30-day VWAP.
The offer opened for acceptance at 9:00 a.m. EAT on October 25, 2024, and will close at 5:00 p.m. EAT on December 5, 2024, with potential for extension subject to approval from the Capital Markets Authority.
Edha Nahdi, managing director of Amsons Group, affirmed that the bid reflects Bamburi’s underlying value and Amsons’ commitment to a solid bilateral business relationship between Kenya and Tanzania. Amsons’ partnership with KCB Investment Bank as a transaction adviser further underscores the strategic importance of this acquisition in the Kenyan market.
“This offer is not only robust but is backed by substantial financial guarantees from East Africa’s leading banking institutions, demonstrating our commitment to the Kenyan market and capital markets compliance,” said Nahdi.
He emphasized Amsons’ intention to engage extensively with Bamburi shareholders to ensure transparent communication about the offer, financial underpinnings, and strategic vision for Bamburi Cement’s future.
Regulatory filings show Bamburi Cement’s shareholder composition includes 3,954 local individuals holding 4.28% and 557 local institutions with a 33.56% stake as of December 31, 2023. Amsons will reach out to these stakeholders in the coming days to secure support for the bid and offer further details on the break fee and KCB-backed financial guarantees.
The bid represents a significant step in Amsons’ corporate expansion plans into Kenya, with further investments expected in diverse sectors. Nahdi also outlined Amsons’ intention to explore additional foreign direct investments (FDI) in Bamburi Cement’s grinding and clinkerisation plants.
Founded in 2006, the family-owned Amsons Group has steadily diversified from its origins in bulk oil and petroleum, operating under the Camel Oil Tanzania brand, to become a key player in East Africa’s manufacturing, transport, and fuel sectors. The Group’s growing footprint includes a 6,000MT/day cement manufacturing capability, bolstered by its recent acquisition of Mbeya Cement, alongside a 500MT/day wheat milling plant, Inland Container Depots (ICDs), and a robust transportation fleet across the region.
“Camel Cement and Tembo Cement have become household names in Tanzanian construction, and we see a strong potential to extend this success into Kenya with Bamburi Cement’s established market position,” Nahdi added. “We intend to bring our advanced manufacturing technology to Kenya, building on Bamburi’s legacy to support sustained growth in Kenya’s construction sector.”
With support from Tanzanian President Samia Suluhu and Kenyan President William Ruto, both key advocates of cross-border investment, Amsons Group sees this acquisition as an opportunity to deepen economic ties and foster shared growth in East Africa.
