- Savannah Clinker seeks to amass 100% of the Nairobi Securities Trade-issued shares of Bamburi Cement for $197.3M (KES25.4Bn), a suggestion that’s larger than the $180M (KES23Bn) positioned earlier by Amsons Group.
- The competitors between Savannah Clinker and Amsons Group underscores an ever-persistent rivalry between Kenyan and Tanzanian companies within the East African market.
- In July, Amsons’ $180M supply was seen as a strategic transfer to broaden its footprint in Kenya and faucet into the profitable development market.
The push by Tanzania-based conglomerate Amsons Group to develop its footprint throughout Kenya by the acquisition of Bamburi Cement has taken a contemporary twist after a Kenyan-based mining agency Savannah Clinker Ltd positioned a extra engaging counter-offer for the complete acquisition of Bamburi PLC.
Within the newest submitting with market regulators, Savannah Clinker seeks to amass 100 per cent of the Nairobi Securities Trade-issued shares of Bamburi Cement for $197.3 million(KES25.4 billion), a suggestion that’s larger than the $180 million or KES23 billion positioned in July 2024 by Amsons Group.
Savannah Clinker’s supply not solely surpasses the preliminary bid by cement producer Amsons Group, but additionally highlights the strategic significance of Bamburi Cement as a key participant within the area’s development sector in addition to trade.
“I’m happy to current this competing supply, which represents a patriotic dedication to safe Kenyan manufacturing pursuits, now that a chance to exit a serious multinational participant is on the desk,” mentioned Savannah Clinker Govt Chairman and Director Benson Ndeta in a press release.
He added, “I’ve been concerned within the native [Kenyan] enterprise and development industrial sector for the final 20 years. I’ve served as a former non-executive chairperson on the East African Portland Cement and a former majority shareholder at Savannah Cement till November 2022. I’m due to this fact dedicated to investing within the development of Bamburi Cement by this acquisition bid and an excellent bigger capital expenditure outlay to speed up modernization and working effectivity programmes.”
Rivalry between Kenyan and Tanzanian companies
The competitors between Savannah Clinker and Amsons Group underscores an ever-persistent rivalry between Kenyan and Tanzanian companies within the East African market. Bamburi Cement, one of many largest cement producers within the area, is a invaluable asset for any firm seeking to solidify its place within the mining, constructing, and development trade.
Amsons Group, a Tanzanian conglomerate with various pursuits, had initially gave the impression to be the frontrunner within the race to amass Bamburi PLC, which exited Uganda market late final yr. Their $180 million supply was seen as a strategic transfer to broaden their footprint in Kenya and faucet into the profitable development market. Nevertheless, Savannah Clinker’s counter-offer not solely challenges Amsons’ place but additionally introduces a nationalist aspect to the bidding warfare, with Ndeta framing his bid as a transfer to maintain Bamburi Cement firmly underneath the management of Kenyan arms.
Monetary and strategic implications
Savannah Clinker’s supply of $0.54 (KES70) per share represents a 53.34 % premium over the share value as of July 9, 2024, and a 64.55 % premium over the 30-day volume-weighted common value (VWAP), the Kenyan firm defined in a market replace. This premium is a transparent pointer to Ndeta’s dedication to securing Bamburi Cement and is prone to enchantment to shareholders in search of quick returns.
Along with the monetary incentives, Savannah Clinker’s bid presents a number of strategic benefits. By buying Bamburi Cement, Savannah Clinker would acquire management of a serious participant within the East African cement market, with appreciable manufacturing capability, a well-established model and market share, too. Topic to regulatory approvals, the acquisition would additionally permit Savannah Clinker to broaden its operations and improve its market share, positioning it as a dominant power within the regional development trade.
Furthermore, Savannah Clinker’s dedication to retaining as much as 40 % of Bamburi’s shares as free float on the Nairobi Securities Trade (NSE) displays a need to take care of transparency and proceed participating with institutional and native traders. This strategy contrasts with Amsons Group’s supply, which has been criticized for probably resulting in the delisting of Bamburi from the Nairobi bourse.
Regulatory and market reactions
The Capital Markets Authority (CMA) and different regulatory our bodies will play an important position within the final result of this bidding warfare. Each Savannah Clinker and Amsons Group might want to navigate a fancy regulatory house to safe approval for his or her respective presents.
Savannah Clinker’s dedication to finishing the transaction by February 28, 2025, supplies a further benefit over Amsons Group, which has set an extended timeline with a protracted cease date of November 28, 2025. This accelerated timeline might show engaging to shareholders wanting to money in on their investments sooner moderately than later.
Market reactions to Savannah Clinker’s counter-offer have been largely constructive, with analysts noting the strategic significance of protecting Bamburi Cement underneath Kenyan possession. The supply has additionally sparked renewed curiosity in Bamburi’s shares, with costs anticipated to rise because the bidding warfare intensifies.
Learn additionally: Tanzania’s Taifa gasoline to shake-up Kenya’s cooking gasoline market
Implications for the East African cement market
The end result of this bidding warfare will have an effect on the East African cement market. If profitable, Savannah Clinker’s acquisition of Bamburi Cement would strengthen Kenya’s place within the regional development trade and probably result in elevated competitors between Kenyan and Tanzanian companies.
However, if Amsons Group had been to prevail, it might mark a shift within the stability of energy within the East African market, with Tanzanian companies gaining a stronger foothold in Kenya. This might result in elevated competitors and probably decrease costs for shoppers, however it might additionally elevate considerations about international possession of key industries in Kenya.
Because the bidding warfare between Savannah Clinker and Amsons Group continues to unfold, the way forward for Bamburi Cement hangs within the stability. Shareholders might want to fastidiously contemplate the monetary and strategic implications of every supply earlier than making their choice.
For Savannah Clinker, the trail ahead entails not solely securing the required regulatory approvals but additionally profitable over shareholders and convincing them that their supply is in the very best long-term pursuits of the corporate. The agency’s dedication to retaining Bamburi’s Kenyan id and investing in its future might show to be a decisive issue on this high-stakes battle.
Because the deadline for remaining presents approaches, all eyes might be on the East African cement market, the place the rivalry between Kenyan and Tanzanian companies is about to form the way forward for the area’s development trade. Whether or not Bamburi Cement stays underneath Kenyan possession or turns into a part of a Tanzanian conglomerate, the end result of this bidding warfare could have lasting repercussions for each nations and the broader East African market.
