The much-anticipated acquisition of Bamburi Cement, one of Kenya’s largest cement manufacturers, has taken a dramatic turn. Tanzanian conglomerate Amsons Group emerged the winner in a hotly contested bid, following the withdrawal of Kenyan-based Savannah Clinker Limited. The Capital Markets Authority (CMA) confirmed on December 4, 2024, that Savannah Clinker’s bid was nullified after the arrest and subsequent release of its chairman and managing director, Benson Ndeta, over alleged fraud charges.

The transaction will see Amsons acquire up to 100% of Bamburi Cement’s shares from its majority shareholder, Holcim Group. With regulatory hurdles cleared, including approvals from Kenya’s Ministry of Mining and the COMESA Competition Commission, Amsons is poised to make a significant entry into Kenya’s cement market.

The bidding battle

The race for Bamburi Cement was intense, with Savannah Clinker initially leading the charge. The Kenyan firm proposed a bid of Ksh25.41 billion, equivalent to Ksh70 per share, significantly outpacing Amsons’ offer of Ksh23.59 billion (Ksh65 per share). However, legal troubles surrounding Savannah Clinker’s leadership led to the firm’s withdrawal, leaving the door open for Amsons to proceed uncontested.

Ndeta faced accusations of fraud involving Ksh4.5 billion. Although the High Court ordered his release, the legal and reputational damage cast a shadow over Savannah’s bid. Meanwhile, Amsons capitalised on the opportunity, securing the necessary approvals and solidifying its position as the new owner of Bamburi Cement.

Amsons Group: Expanding its footprint

Founded in 2006, Amsons Group is a Tanzanian family-owned business with a diversified portfolio spanning petroleum, cement manufacturing, logistics, and more. Its Camel Cement brand has a production capacity of 6,000 metric tonnes per day, complemented by assets such as a premix concrete plant, a wheat flour milling facility, and an extensive transportation network across East and Southern Africa.

By acquiring Bamburi Cement, Amsons extends its regional influence and cements its status as a powerhouse in the East African construction sector. The move aligns with the company’s growth strategy, which focuses on expanding its manufacturing capabilities and leveraging synergies across its operations.

Implications for the Kenyan market

The acquisition heralds significant changes for Kenya’s cement industry and the broader construction sector.

1. Market dynamics

Amsons’ entry could reshape the competitive landscape, challenging other local players such as East African Portland Cement and National Cement. The Tanzanian firm’s scale and resources might pressure competitors to innovate or consolidate further.

2. Pricing and supply

While reduced competition might lead to short-term price increases, Amsons’ plans to invest in Bamburi’s infrastructure could eventually stabilise prices and improve cement availability.

3. Regional integration

The deal underscores growing regional economic integration as Amsons connects Bamburi’s operations with its existing network in Tanzania, Malawi, Zambia, and beyond.

4. Job market and operations

Although the acquisition may bring technological upgrades and operational efficiencies, it could also lead to restructuring and job cuts in the short term. However, investments in expansion could create employment opportunities in the long run.

5. Regulatory scrutiny

The deal highlights the need for robust regulatory oversight to ensure fair competition and safeguard national interests in critical industries like cement production.

Opportunities: Building a stronger industry

Despite the potential challenges, the acquisition opens up numerous opportunities for growth and development.

1. Technological advancements

Amsons’ investment could modernise Bamburi’s operations, introducing more sustainable and efficient cement production technologies.

2. Infrastructure growth

With the Kenyan government prioritising infrastructure projects, including affordable housing and road construction, the demand for high-quality cement is expected to surge. Amsons’ expanded capacity positions it as a key supplier for these initiatives.

3. Export potential

Bamburi’s strategic location and Amsons’ logistical capabilities could boost Kenya’s cement exports to neighbouring countries, enhancing its role as a regional trade hub.

4. Collaboration opportunities

The acquisition could pave the way for partnerships with government and private developers to accelerate infrastructure development across East Africa.

Conclusion

Amsons Group’s successful bid for Bamburi Cement marks a turning point for Kenya’s cement industry. While the transaction raises questions about market concentration and regulatory oversight, it also promises growth, innovation, and regional integration.

For shareholders, the deal offers a lucrative exit, while for Kenya’s construction sector, it signals the arrival of a new player poised to shape the industry’s future. As Amsons finalises the acquisition, all eyes will be on how it navigates the opportunities and challenges of this landmark transaction.