Tanzania’s leading manufacturing and energy conglomerate, Amsons Group, has issued a binding offer to acquire up to a 100% stake in Kenya’s Bamburi Cement. This move is set to be one of the most significant investments in East African Community (EAC) trade relations, reflecting the deepening economic ties within the region.
Historical Investment in the Making
The proposed acquisition, valued at USD 180 million (approximately Ksh23.1 billion), marks a monumental step for Amsons Group as it aims to invest in one of Kenya’s iconic blue-chip companies listed on the Nairobi Securities Exchange (NSE). If successful, this deal would not only secure Amsons’ position as a major player in the East African cement sector but also bring substantial foreign direct investment into Kenya.
Amsons Group’s Strategic Move
Through its Kenyan subsidiary, Amsons Industries (K) Ltd, Amsons Group has issued a notice of its intention to launch a public takeover offer for Bamburi Cement. The offer price is set at Ksh65 per share, a premium over Bamburi’s share price at the close of trading on July 9, 2024.
Edha Nahdi, Managing Director of Amsons Group, emphasized the strategic importance of this acquisition. “We have great plans to deepen our investment in Kenya and in Bamburi,” Nahdi stated. He further highlighted that this cross-border acquisition would enhance the group’s presence in the East African cement sector, aligning with regional economic development and market integration goals.
Diversified Business Operations
Founded in 2006, Amsons Group is a family-owned business in Tanzania with an annual turnover exceeding USD 1 billion. Initially focusing on the importation of bulk oil and petroleum products under the Camel Oil Tanzania brand, Amsons has diversified significantly. The group now boasts a 6,000MT/day cement manufacturing capability, including the recently acquired Mbeya Cement facility. Additionally, Amsons operates a 500MT/day Wheat Flour Milling Plant, a premix Concrete plant, Inland Container Depots (ICDs), and a vast transportation fleet across Zambia, Malawi, Mozambique, Democratic Republic of Congo, Burundi, and Tanzania.
In the fuel sector, Amsons Group has established fuel depots and over 150 retail stations across Tanzania, Mozambique, Zambia, and the DRC. The group’s recent acquisitions and expansions underscore its ambition and capability to operate on a large scale across multiple industries.
Recent Developments and Strategic Partnerships
Amsons’ growth trajectory continued with the acquisition of a 65% stake in Mbeya Cement Company Ltd from Holcim, following regulatory approvals. This acquisition is part of Holcim’s strategy to extend its leadership in core markets and is a testament to Amsons Group’s strategic and operational excellence.
Martin Kriegner, Holcim’s Regional Head of Asia, Middle East & Africa, commented on the sale: “This agreement to sell our stake in Bamburi Cement 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.”
Future Prospects
Amsons Industries (T) Ltd, known for its quality cement products under the brand names “Camel Cement” and “Tembo Cement,” sees the acquisition of Bamburi as a strategic expansion into the Kenyan market. This move is part of a broader corporate market expansion plan, with Amsons poised to invest in other industries within Kenya in the coming months.
“We intend to replicate our success in Kenya by building on the solid foundation already set by Holcim at Bamburi Cement,” Nahdi stated. He also emphasized the group’s use of world-class cement manufacturing technology, which has driven sustained market growth and partnerships as a preferred supplier in the building and construction sectors.
Economic and Market Implications
The potential acquisition of Bamburi Cement by Amsons Group is likely to have significant economic implications for Kenya. The infusion of foreign direct investment will bolster the country’s economic landscape, potentially creating jobs and enhancing the overall business environment. Moreover, Amsons’ investment could spur further regional integration and cooperation within the EAC, fostering a more cohesive economic bloc.
The binding offer by Amsons Group to acquire Bamburi Cement represents a landmark moment in East African trade relations. It reflects the growing economic integration within the EAC and underscores the strategic importance of cross-border investments in driving regional development. As Amsons Group continues to expand its footprint, the acquisition of Bamburi Cement is poised to cement its position as a major player in the East African cement sector, promising significant growth and development opportunities for both Tanzania and Kenya.
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