The Common Market for Eastern and Southern Africa (COMESA) has granted an unconditional approval for Tanzanian conglomerate AMSONS Group to acquire Bamburi Cement Plc, one of Kenya’s leading cement manufacturers. The approval, which was announced recently, marks a significant milestone for AMSONS Group as it seeks to expand its footprint in the East African region and enhance its cement manufacturing capacity.
AMSONS Group, through its Kenyan subsidiary, AMSONS Industries Kenya Limited, is set to acquire 100% of Bamburi Cement’s 362,959,275 shares in a deal valued at approximately Ksh 24 billion. This move, according to COMESA’s Competition Commission, will not undermine competition within the regional market but is expected to boost competition, contributing positively to the trade bloc.
The COMESA Competition Commission’s analysis concluded that the proposed merger would not lead to the creation of a dominant position that could give the acquiring party the power to engage in anti-competitive practices in the market. The commission expressed confidence that the merger would instead enhance the overall competitiveness of the sector within COMESA, thereby benefiting consumers and regional trade. This is a critical point, given that cement is a vital commodity for infrastructure development across East Africa, a region that continues to experience rapid urbanization and industrialization.
AMSONS Group, which was founded in 2006 in Tanzania, has expanded its operations beyond its initial focus on bulk oil and petroleum product importation under the Camel Oil Tanzania retail brand. The company’s diversification into cement production has been driven by a strategic vision to tap into the growing demand for building materials in the region. AMSONS Group’s acquisition of Bamburi Cement is part of this broader expansion strategy, which also includes its recent acquisition of the Mbeya Cement facility in Tanzania, bringing its total manufacturing capacity to 6,000 metric tonnes of cement per day.
The company’s CEO, Edha Nahdi, welcomed the approval from COMESA, describing it as a significant boost to AMSONS Group’s plans to expand its presence in Kenya and the wider East African market. Nahdi expressed confidence that the acquisition would provide a win-win scenario for both Bamburi Cement’s investors and the economies of Tanzania and Kenya. “This transaction will help to foster economic growth and trade within the region, benefitting both parties and contributing to the overall development of our countries,” he stated.
The deal also signals a further strengthening of ties between Tanzania and Kenya, both of which are key players in the East African Community (EAC). With the cement industry being a critical sector for infrastructure and real estate development in both countries, the merger is expected to create synergies that will enhance the supply of cement and improve competitiveness in both markets.
As part of the transaction, AMSONS Group has appointed KCB Investment Bank as its transaction adviser. This indicates that the Tanzanian firm is making a strategic and well-coordinated move to ensure that the acquisition proceeds smoothly. Standard Chartered Nominees and Aksaya Investment Holdings, which are significant shareholders in Bamburi Cement, have already agreed to the transaction, solidifying the deal’s prospects.
Bamburi Cement has been a key player in Kenya’s cement industry for decades, with LafargeHolcim owning a controlling stake of 58.6%. With this acquisition, AMSONS Group looks set to expand its footprint in the regional cement market, providing much-needed competition and potentially reducing the cost of cement in the region.
In conclusion, the approval of AMSONS Group’s acquisition of Bamburi Cement by COMESA marks a crucial moment in the regional cement industry. It is a strategic move that will not only enhance AMSONS Group’s manufacturing capacity but also foster greater competition within the East African market, benefiting consumers and driving regional economic growth. The deal underscores the growing importance of cross-border investments in driving industrialization and trade within the African continent.
