Bamburi Cement, one of Kenya’s iconic firms, is on sale. And Benson Sande Ndeta, the businessman who was thrust out of another cement firm, believes he can pay Bamburi owners Sh25.41 billion and fly with the eagles.
Mr Ndeta wants to ride on Savannah Clinker, a private limited company he registered in 2019. He believes his offer of Sh70 per share will sway Bamburi shareholders to sell the company to Savannah instead of entrusting it to Tanzania-based conglomerate Amsons Industries, which offered Sh65 per share or a total of Sh23.59 billion.
He says his offer, which is Sh1.82 billion higher than Amsons’, represents “a patriotic commitment to secure Kenyan manufacturing interests, now that an opportunity to exit a major multinational player is on the table.” He adds that he stands ready to invest much more in Bamburi after the deal.
“I am committed to investing in the growth of Bamburi Cement through this acquisition bid and an even larger capital expenditure outlay to accelerate modernisation and operating efficiency programmes,” said Mr Ndeta on the day he published his intention to put in a competing offer.
Mr Ndeta, an architect by training, a photography and music lover who is also an avid lawn tennis player and golfer with a passion for rock climbing, is quick to put his best foot forward. He believes his 20-year involvement in the local business and construction industry speaks volumes about his passion for acquiring Bamburi.
In doing so, he has sparked a bidding war and now the Bamburi share is causing ripples at the Nairobi Securities Exchange. Mr Ndeta’s notice of a competing offer rallied the share to Sh77.50 at the close of trading on Friday as investors continued to price in the new bid as well as Bamburi’s announcement of a special dividend later this month.
Mr Ndeta is no stranger to the cement business, where he has been blowing hot and cold when it comes to cementing mega deals.
In 2015, he bought out Chinese companies, Wan Ho International and Acme Wanji, which collectively owned 60 percent of Savannah Cement. The deal was valued at about Sh1.5 billion. The deal would later trigger a row with his fellow shareholders, who alleged that the share purchase was never approved by the board.
Mr Ndeta remained the majority shareholder in Savannah Cement amid the wrangling until November 2022, when his stake was taken over by banks. He had pledged his shares as collateral. Last week’s notice stated that his stake was “transferred to a third party.”
Savannah Cement went into administration on July 21, 2023, amid mounting debts. It owes creditors Sh18 billion, with Sh8.89 billion and Sh5.23 billion owed to KCB Group and Absa Bank Kenya respectively.
But Mr Ndeta, who also served as the chairperson of the now struggling East African Portland Cement between June 2003 and June 2008, believes Savannah Cement is now a closed chapter.
He founded Savannah Clinker in 2019 and announced in April last year that he had raised $500 million (Sh65 billion) through a privately placed debt arrangement for the construction of a limestone extraction and clinker processing plant in Kitui.
Mr Ndeta hired a Chinese contractor, Sinoma International, for the Kitui work. He has not disclosed where he will get the money to take on Amsons in the race for Bamburi. However, the clearance from the Capital Markets Authority has sent a signal that he may have demonstrated to the regulator that he can pay if his bid goes through.
What is certain is that Bamburi, the jewel that joined the NSE 44 years ago, will not just leave the bourse quietly. The bidding war between Mr Ndeta and Edhah Abdallah Munif, who has an 80 percent stake in Amson Industries, is likely to trigger a battle between Bamburi’s majority and minority shareholders as they seek the best deal on the table.
Mr Ndeta proposes to complete the buyout by February 28, 2025, while Amson offered to close the deal by November 28, 2025.
Another consideration is that Bamburi’s major shareholder Holcim, which holds a 58.3 percent stake through two investment vehicles—Fincem Holding Limited and Kencem Holding Limited— had already committed to selling its stake to Amsons.
Amsons had even included a break fee penalty clause that would see it pay $5.31 million (Sh683 million) if it walked out of the proposed deal for reasons other than legal hitches.
The firm said the fee will become payable if the offer has not occurred by the end of November 28, 2025, except if the deal is derailed by “an award, decision, injunction, judgment, order, ruling or verdict of any court or tribunal of competent jurisdiction” that makes the deal “unlawful or otherwise prohibiting the purchase” of the shares.
The entry of Savannah into the race puts this agreement to the test since selling the firm to Amsons means leaving about Sh1.82 billion on the table—something that may not sit well with Bamburi’s minority owners.
