Amsons Group, a prominent Tanzanian business conglomerate, has officially launched a high-stakes marketing campaign to win over the shareholders of Bamburi Cement (NSE: BAMB) as it seeks to fully acquire the company. Following the release of a detailed shareholder circular on October 24, 2024, Amsons Group has intensified efforts to secure the required shareholder support to finalize the acquisition.
The bid, which is financially underwritten by KCB Bank, marks a first-of-its-kind move in the Kenyan capital markets. It is secured by a US $5.3 million break fee, currently held in an escrow account at ABSA Kenya. This unprecedented approach demonstrates the seriousness and strategic intent behind Amsons Group’s offer to acquire Bamburi Cement.
Through its Kenyan subsidiary, Amsons Industries (K) Ltd, the Tanzanian giant intends to invest over Ksh 23.5 billion to acquire up to 100% of Bamburi Cement’s shares, priced at Ksh 65 per share. The acquisition price represents a premium that has caught the attention of shareholders and market analysts alike.
Key Terms of the Amsons Offer
In a statement released with the shareholder circular, the directors of Bamburi Cement outlined the terms of the offer, which officially opened for acceptance at 9:00 a.m. EAT on October 25, 2024, and will remain open until 5:00 p.m. EAT on December 5, 2024. Shareholders will have the option to either accept or reject the offer during this period. Should Amsons Group require more time to gather approvals and finalize the deal, the closing date can be extended, pending the Capital Markets Authority’s (CMA) consent.
According to Edha Nahdi, the Managing Director of Amsons Group, the offer price of Ksh 65 per share represents a 42.39% premium over the closing price of Bamburi shares on the Reference Date. Furthermore, the offer provides a 52.94% premium over the 30-trading-day volume-weighted average price (VWAP) of Bamburi shares prior to the public disclosure of Amsons Group’s acquisition intent.
“The premium we are offering underscores the value we see in Bamburi Cement,” said Nahdi. “Our bid reflects both the strong underlying fundamentals of the company and the immense potential we aim to unlock through strategic investments.”
Amsons Group’s bid is bolstered by a partnership with KCB Investment Bank, which is acting as the transaction adviser. This partnership reflects the group’s commitment to professionalism and transparency in engaging with Kenyan capital markets. It also underscores the company’s determination to win the trust of Bamburi shareholders during this critical phase.
Securing Shareholder Support
Amsons Group has launched a strategic marketing campaign targeted at Bamburi shareholders. With regulatory filings indicating that Bamburi’s shareholder register includes 3,954 individual local investors holding a 4.28% stake, as well as 557 local institutions accounting for a 33.56% stake, Amsons is intent on addressing the concerns of all investor groups.
“We greatly respect all Bamburi shareholders,” Nahdi remarked. “Our goal is to engage with them in a transparent and respectful manner, explaining every facet of our offer—including the unprecedented break fee we’ve put in place as a demonstration of our commitment.”
Amsons Group is providing Bamburi shareholders with detailed financial assurances backed by KCB Bank, the largest financial solutions provider in Kenya. The firm believes these guarantees will enhance shareholder confidence and demonstrate the credibility of the offer. “Our bid is fully underwritten by strong financial partners from East Africa, ensuring that shareholders will see the value and security they deserve in such a transaction,” Nahdi added.
In addition to the acquisition offer, Nahdi highlighted that Amsons Group is exploring a long-term investment strategy for Bamburi Cement. The group intends to inject Foreign Direct Investments (FDIs) into modernizing Bamburi’s grinding and clinkerisation plants, ensuring the company’s continued growth and competitiveness in the East African market.
Fostering Bilateral Relations between Kenya and Tanzania
The acquisition bid is not just a financial transaction; it is also being framed as a symbol of growing economic cooperation between Kenya and Tanzania. Nahdi noted that the support of Tanzania’s President Mama Samia Suluhu and Kenya’s President William Ruto has been instrumental in bolstering investor confidence. “We are deeply grateful for the leadership of both President Suluhu and President Ruto. Their commitment to fostering strong bilateral relations has created a conducive environment for large-scale investments like ours,” Nahdi explained.
He further stressed that Amsons Group views its entry into the Kenyan market as part of a broader vision of shared prosperity for both nations. “This is not just about Bamburi Cement; it’s about contributing to Kenya’s economic development and deepening the bond between our two countries,” Nahdi said.
A Growing Conglomerate with Regional Ambitions
Amsons Group’s foray into Kenya comes on the heels of significant growth and diversification in its home market of Tanzania. Founded in 2006, Amsons Group began as a bulk importer of oil and petroleum products, operating under the well-known retail brand Camel Oil Tanzania.
Over the years, the group has diversified its portfolio to include several key industries. It currently boasts a cement manufacturing capacity of 6,000 metric tons per day, in part thanks to its acquisition of the Mbeya Cement facility. Other notable ventures include a 500MT/day wheat flour milling plant, a state-of-the-art premix concrete plant, and significant investments in inland container depots (ICDs), fuel depots, and transportation fleets across multiple countries, including Zambia, Malawi, Mozambique, the Democratic Republic of Congo (DRC), and Burundi.
Amsons Group’s cement manufacturing brands, Camel Cement and Tembo Cement, are household names in Tanzania. The group’s dominance in the fuel sector is also notable, with over 150 retail fuel stations across several African countries, including Tanzania, Mozambique, Zambia
, and the DRC. The group has established itself as a leader in energy and transportation logistics, further cementing its reputation as a robust and diversified conglomerate.
Amsons Group’s Ambitious Market Expansion into Kenya
Amsons Group’s attempt to acquire Bamburi Cement is part of a broader corporate strategy to expand into the Kenyan market. According to Nahdi, the acquisition of Bamburi Cement would serve as the group’s formal entry into the Kenyan economy, with additional investments planned for other industries in the near future.
“We view this as the first of many strategic investments in Kenya,” Nahdi stated. “We have identified several opportunities in the manufacturing and infrastructure sectors that align with our expertise and growth vision. Our success in Tanzania has been driven by our commitment to quality, innovation, and partnerships, and we intend to replicate this success in Kenya.”
Nahdi added that Amsons Group deploys world-class cement manufacturing technologies that have enabled it to become the preferred supplier for major building and construction projects across Tanzania. “We see Bamburi Cement as a solid foundation to build on, and we’re confident that we can bring additional value through our advanced technologies and market expertise,” he noted.
A Glimpse Into the Future: Modernizing Bamburi Cement
Beyond the acquisition, Amsons Group has ambitious plans to modernize Bamburi Cement’s production facilities. The group aims to invest in modernizing both the grinding and clinkerisation plants to increase efficiency and capacity.
“We’re not just acquiring a company; we’re investing in its future,” Nahdi explained. “Our modernization plans are designed to enhance Bamburi’s competitive edge, reduce production costs, and increase output, all of which will contribute to its long-term profitability.”
This investment is expected to not only benefit Bamburi Cement’s operations but also position the company as a key player in the region’s growing construction industry.
Strategic Partnerships with Local Stakeholders
In addition to the financial backing from KCB Bank, Amsons Group plans to establish partnerships with local Kenyan companies and institutions to support its growth strategy. These collaborations will be crucial for navigating the regulatory landscape and securing the support of local communities and shareholders.
“We recognize that Kenya has a unique business environment, and we are committed to building relationships with local partners,” Nahdi said. “By working closely with Kenyan stakeholders, we aim to create a mutually beneficial partnership that will drive economic growth for both countries.”
A Historic Move in Kenyan Capital Markets
The Bamburi Cement acquisition bid marks a significant moment in Kenyan capital markets, not only because of its size and scope but also due to the use of innovative financial tools like the US $5.3 million break fee held in escrow. This level of financial commitment has never been seen before in the Kenyan market and demonstrates the seriousness with which Amsons Group is approaching the deal.
“This is a first in Kenyan capital markets, and it highlights the sophistication and seriousness of our offer,” Nahdi said. “We are not just making promises; we are putting real money on the table to show our commitment to this transaction.”
As the bid progresses, all eyes will be on Bamburi Cement shareholders and the Capital Markets Authority to see whether the acquisition is successful. If completed, the deal will not only solidify Amsons Group’s presence in Kenya but also serve as a blueprint for future cross-border acquisitions in East Africa.
