Tanzania’s Amsons Group buys Bamburi Cement in a $538 million cross-border deal
Tanzania’s Amsons Group has successfully completed the acquisition of the Kenyan Bamburi Cement, a main player of the East African cement market, after the withdraw of its rival Savannah Clinker company from the bidding process.
A Strategic Move for Amsons
The $1bn-plus worldwide family business, Amsons Group Limited, signed the contract through its Kenya-based subsidiary, Amsons Industries Kenya Limited. The group had proposed Ksh.23.9 billion in July to fully manage Bamburi Cement through buying 100% of the firm, largely owned by Holcim, based in Switzerland with 58.6% stake.
This has now been approved by the Kenyan Mining Ministry and the COMESA Competition Commission which makes the deal authentic.
‘This milestone proves the solidity and reliability of our proposition,’ stated the Amsons CEO Edha Nahdi in a statement, who added that the company is focused on bringing value for shareholders of Bamburi Cement.
Bamburi Cement: A Coveted Asset
Founded in the early seventies, Bamburi Cement Company is a stock quoted company that has been at the forefront of construction industry in Kenya. Its sale to Amsons complements Holcim’s global divestment plan and concentrates on fast-growing economies especially in North America. The approval of this deal comes days after Holcim said it planned to sell its 84% stake in its Nigerian subsidiary Lafarge Africa for $1bn.
List of Articles: Savannah Clinker’s Sudden Exit
Initially, Kenya based firm Savannah Clinker, owned by Benson Ndeta, had offered higher bid of Ksh. 25.4 billion for Bamburi. Savannah deposited Ksh. 5 billion and also proposed to give Ksh. 1.8 billion as further incentive for shareholders.
Nevertheless, Ndeta’s implication in a Ksh. 700 million fraud alleged deal made things worse. The businessman was also captured by the police and charged with conspiracy and forgery but he was not guilty to any of the charges. Although he was discharged unconditionally on a High Court order, the issue cast aspersions over the credibility of Savannah’s bid.
Implications for the Industry
The investment by Amsons Group is a unique cross-border investment in Kenya, which demonstrates confidence in the country’s industrialization process despite the current wavering economic performance.
For Bamburi Cement this may mean a new era of growth under its new owners Amsons which has a large conglomerate in Tanzania in manufacturing, petroleum and logistics.
With the opportunities of entering the new market segments, exiting the business-related challenges, as well as expanding a successful into East Africa and consolidating its position there, Amsons is expected to close the deal by December 5.