Bamburi's major shareholders agree to sell to Tanzania bidder

A Tanzanian conglomerate that has bid to acquire Bamburi Cement has received backing from the major shareholders of the Kenyan cement firm.

Holcim, the Swiss-based global building material and aggregates company, has agreed to sell its entire stake in Bamburi Cement to Tanzania’s Amsons Industries.

Bamburi Cement, in a statement Friday, said the two largest shareholders of the cement maker had earlier this month agreed to sell their shareholding to Amsons Group, the Tanzanian manufacturing and energy giant.

Holcim owns 58.6 per cent of Bamburi’s total issued share capital through Fincem Holding (29.3 per cent) and Kencem Holding Ltd (29.3 per cent). 

Kenyan institutions and individuals own an estimated 32.17 per cent of Bamburi shares while another 9.23 per cent is held by other foreign investors.

“Amsons has confirmed that on July 10, 2024, it received an irrevocable undertaking from the following existing shareholders of Bamburi as part of the offer: Fincem Holding…and Kencem Holding,” said Bamburi cement.

Amsons earlier this month said it had issued a binding offer to acquire the entire shareholding in Bamburi Cement for a total sum of Sh23.1 billion, which translates to Sh65 per share.

This was a premium of 42.39 per cent to the closing price of the shares on July 9, when they traded at Sh45.65 per share. Following the offer that was made public on July 10, the share price has rallied to Sh61. 

Bamburi Cement said it had received confirmation that Amsons had access to adequate funds to conclude the deal.

“According to the offeror’s statement, KCB Investment Bank Ltd, being the transaction advisor and sponsoring stockbroker of Amsons has confirmed that Amsons has sufficient financial resources at its disposal to satisfy the consideration payable for all shares in Bamburi pursuant to a full acceptance of the offer,” said Bamburi.

The transaction is subject to regulatory approvals. 

“Should the offer achieve 75 per cent or more of the offer hares, the offeror will evaluate the continued efficacy of Bamburu remaining listed and may then, subject to approval by the Capital Markets Authority (CMA), apply for Bamburi to be delisted from NSE,” said Bamburi in the statement yesterday.

“In accordance with the takeover regulations, if the offer results in the offeror acquiring 90 per cent of the offer shares, the offeror shall offer the remaining shareholders a consideration that is equal to the prevailing market price of the voting shares or the price offered to the other shareholders, whichever is higher, and the provisions of the Companies Act shall apply.”

Amsons, a family-owned business founded in 2006, has diversified from its roots in bulk oil and petroleum products to become a manufacturing and energy conglomerate with over $1 billion (Sh130 billion) in annual revenue.

Its cement operations include a 6,000 tonnes per day facility and the recently acquired Mbeya Cement in Tanzania.

“We have great plans to deepen our investment in Kenya and in Bamburi,” said Amsons Group Managing Director Edha Nahdi in a statement when the firm announced the offer.

“The proposed cross-border acquisition will further strengthen our position in the East African cement sector as part of our regional economic development and market integration strategy.”

The acquisition of Bamburi would mark Amsons’ formal entry into the Kenyan market, where the group plans to make further investments in the coming months, according to Nahdi.

Holcim said the deal “advances Holcim’s strategy of extending our leadership in our core markets as the global leader in innovative and sustainable building solutions.”

“With Amsons Group, we are pleased to have found a strategic and trusted partner best positioned to develop Bamburi Cement PLC’s business in the long term,” said Holcim’s Regional Head of Asia, Middle East and Africa Martin Kriegner in the statement.

The proposed $180 million acquisition would mark a significant milestone for Amsons as it seeks to invest in one of Kenya’s iconic blue-chip companies listed on the Nairobi Securities Exchange.