Why MPs could stop acquisition of East Africa Portland Cement by Tanzania firm

Lawmakers are now considering stopping the sale of East Africa Portland Cement Company (EAPC) shares unless the parties involved can prove that the acquisition process is above board. 

The National Assembly Committee on Trade, Industry and cooperatives yesterday poked holes into the planned acquisition of EAPC shares by Tanzania's Kalahari Cement, terming the process opaque and a potential hostile takeover.

The House team, led by the session chair and Aldai MP Maryanne Keitany, wondered why the company’s management and staff were not satisfactorily consulted before initiation of the process in view of the fact that 52 per cent of EAPC is being publicly owned through the National Treasury and the National Social Security Fund.

“This is a matter of national interest. Given the shareholding structure of EAPC company, we find it alarming that the existing shareholders and the company were not given opportunity to buy these shares before they were offered to the investor,” said Keitany during a meeting with EAPC managing director Mohamed Adan on the sale of the shares.

“This is a very pertinent question, because the majority of these 52 per cent also represent the same staff and these same staff have relatives, they have their own livelihoods, and for that we must understand what plans are there.”

The Capital Markets Authority approved the controversial sale of 29.2 per cent of EAPC to a Tanzanian cement baron at a price it acknowledged was a steep discount.

In correspondence to the Clerk of the National Assembly dated August 25, 2025 following inquiry by parliament, CMA chief executive Wyckliffe Shamiah said the regulator had granted an exemption to Kalahari Cement, a vehicle for Tanzanian businessman Edhah Abdallah Munif, to acquire the stake from Switzerland’s Holcim for Sh718.7 million without making a mandatory buyout offer to other shareholders.

The controversial deal was part of a wider African exit by Holcim, which also sold its businesses in Nigeria, Uganda, Tanzania, and Zimbabwe.

In Kenya, Holcim last year sold its 58.6 per cent stake in Bamburi Cement to Munif’s Amsons Group for Sh23 billion, a transaction that culminated in Bamburi’s delisting.

The deal for EAPC, valued at Sh27.30 per share, has been a point of intense contention.

“The agreed consideration represents a significant discount compared to the current market value, had the shares been acquired through an on-market transaction,” Shamiah said in the letter. 

Yesterday, the committee also sought to understand what measures had been put in place during the acquisition process to safeguard the interests of the government, employees and even the minority shareholders.

“Public participation is critical, because this is not just any private company. The people of Kenya, through their pensions and taxes, own a majority of this firm," said Keitany.

"We must know if due diligence was done and if employees and local communities were involved.” 

Adan told  the committee that the management and staff of the company had not been engaged on the proposed acquisition and this had led to anxiety due to the fear of looming job losses and deviation from already established operation guidelines. 

“As management, we have not been approached, and there has been no visibility on due diligence," he said.

"Employees are understandably jittery, because livelihoods are at stake. Human capital is key to our success, and any change of ownership will affect them.” 

The committee asked why the company did not buy back the shares instead of allowing the Kalahari Group takeover—and in the event it decided to do so, whether it had the financial might. 

“A share buyback could settle this matter once and for all, as it would increase the stake of existing shareholders. However, no such option has been tabled for us,” said Funyula MP Wilberforce Oundo.

The House team also emphasized on the need to summon and question CMA and Competition Authority of Kenya on whether they had fulfilled their oversight roles relating to the proposed acquisition.

“Where there is no public participation, Parliament must step in to exercise its oversight duty. This deal touches on taxpayers, employees, and local communities in quarrying areas, and we cannot allow it to proceed in secrecy,” added Keitany.

At the same time, the MPs raised issue with the lack of appointment of the EAPC board chairperson, further questioning why the process appeared to rely on government nomination rather than the company’s Memorandum and Articles of Association.

“You cannot run on tradition. Appointments must be anchored in law. We want the memos, articles and any State Corporations Act provisions governing this entity,” reiterated Keitany.

The MD responded that the company’s Articles of Association were outdated and inconsistent with current corporate governance laws.

He however added that the company would act to ensure that they were consistent with the Companies Act and the State Corporations Act.

The committee also demanded to know the long-term strategic plan by Kalahari, given its existing operations through Bamburi Cement.

Adan said the company had not received official communication from the prospective buyer and that most of what they heard was “market speculation".