Dar firm tightens grip on Kenya market with Sh723m EAPC deal

The new owners of Bamburi, Amsons Group, have strengthened their hold on Kenya’s cement industry after the acquisition of a 29.2 per cent stake in East African Portland Cement (EAPC).

Through the locally incorporated Kalahari Cement, Tanzania’s Amsons has acquired the stake of two other firms – Associated International Cement and Cementia Holding AG – in EAPC.

This comes shortly after the two companies sold their stake in Bamburi to Amsons, giving the firm a strong footing in Kenya’s cement industry. The two firms, owned by Swiss giant Holcim, had a 14.6 per cent stake in EAPC.

Associated International Cement and Cementia Holding AG also offloaded a combined 58.6 per cent stake in Bamburi to Amsons in a transaction concluded in December 2024.

The Tanzanian firm also bought out retail shareholders, with its ownership now standing at over 96 per cent. The completion of the transaction will see Kalahari emerge as the single largest shareholder, ahead of the National Social Security Fund (NSSF), which has a 27 per cent stake in the cement producer. 

In a statement confirming the completion of the deal, Amsons Group Managing Director Edha Nahdi said Kalahari Cement would strategically leverage its resources to drive growth and strengthen the cement industry’s infrastructure through enhanced production capabilities and the creation of new opportunities for innovation and market expansion.

“As a long-term strategic investor, Kalahari Cement will assist EAPC to achieve its strategic objectives through a shared prosperity model with all stakeholders, from staff, trade partners and government agencies of Kenya. At Amsons Group, we do not intend to spare any resource, financial or otherwise, in our turnaround partnership with all EAPC Stakeholders,” said Nahdi.

Kalahari said it had concluded its bid to acquire the stake at a discounted Sh27.30 per share. This means the company will pay Sh723.8 million for the 29.2 per cent stake or 26.32 million shares. EAPC stock traded at Sh60.50 per share at the Nairobi Securities Exchange (NSE) on Tuesday. 

While the transaction was approved as a private transaction, there have been concerns by MPs that the share was undervalued. 

MPs have also raised concerns about Amsons’ dominance of the local cement industry after the twin acquisitions of Bamburi and EAPC.

“On August 5, the Authority approved the exemption application pursuant to Regulation 5(1) of the Take Over Regulations. The Authority further approved the proposed acquisition as a private transaction under the Capital Markets Act and the Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023,” said Kalahari Cement yesterday.

“Kalahari’s investment is designed to build long-term value for EAPC, through strengthening EAPC’s infrastructure and providing access to additional resources. The proposed acquisition is strategically positioned to ensure continuity by facilitating the entry of a committed and experienced strategic investor. This move is set to drive growth and strengthen the cement industry’s infrastructure through enhancing production capabilities and creating new opportunities for innovation and market expansion.”

The conclusion of the deal will see Kalahari emerge as the largest shareholder and is likely to orchestrate a management and board shakeup.

Other major shareholders are NSSF, with a 27 per cent stake, and the National Treasury (25.3 per cent) shareholding.

The shareholding of the two state entities at 52.3 per cent has seen Treasury manage to call the shots at the cement producer.

Other than a strong brand in the market that has seen EAPC’s Blue Triangle cement continue to command a chunk of the local industry, shrugging off the burden of state ownership and its bureaucracy, as well as stiff competition, EAPC is a magnet for its real estate.

It owns huge tracts of land in Kitengela, which it said recently it is in the process of selling off.

The first phase of this planned sale of land is expected to raise Sh5 billion to enable the firm to access working capital as well as pay a special dividend to shareholders.

Aside from Bamburi and now EAPC, Amsons also owns Tanzania’s Mbeya Cement.