Amsons Group’s Kalahari Cement unit increases its stake in EAC to 56.2%

• Kalahari Cement has signed a share purchase agreement (SPA) to acquire an additional 27% equity stake in East African Portland Cement (EAPC), one of Kenya’s major players in the cement manufacturing sector.
• The $12.3 million deal will see the Amsons Group subsidiary purchase an additional 24,300,000 common shares from the National Security Fund (NSSF), making it a majority shareholder.
• However, the Amsons Group subsidiary noted that it has no plans for a full takeover of the Athi River-based company.

Tanzania-based conglomerate Amsons Group’s push to secure firm control over cement operations in the region has intensified as Kalahari Cement has increased its stake in Kenya-based East Africa Portland Cement (EAPC) to 56.2 percent. This follows the conclusion of a new acquisition of 24,300,000 ordinary shares for $12.3 million (KES1.6 billion) by Kalahari Cement from the National Security Fund (NSSF).

In an update to the markets on Wednesday, Kalahari Cement, which was registered in Kenya in May, said it has signed a share purchase agreement (SPA) to acquire an additional 27 percent equity stake in EAPC, one of Kenya’s major players in the cement manufacturing sector.

Kalahari Cement confirmed that it had entered into the SPA NSSF on Tuesday this week, in yet another strategic investment offer whereby the company will acquire 24,300,000 ordinary shares at KES 66 per share in the issued share capital of EAPC from NSSF, subject to regulatory approval.

While the proposed transaction will see new entrant Kalahari Cement acquire a controlling stake in the troubled EAPC, the Amsons Group subsidiary noted that it has no plans for a full takeover of the Athi River-based company.

The growing importance of Kalahari Cement in EAPC

On November 12 this year, Kalahari Cement announced its major entry into the Kenyan cement manufacturing business with the acquisition of a 29.2 percent stake in EAPC from Associated International Cement Limited (AIC) and Cementia Holding AG. Bamburi Cement Plc, which was also bought by Amsons Group in late 2024, also owns approximately 12.5 percent of the common shares in EAPC.

According to Amsons Group Managing Director Edha Nahdi, Kalahari Cement has no plans to make a blanket offer for all voting shares in EAPC and will apply to the Capital Markets Authority (CMA) for an exemption from the obligation to make a takeover bid to all shareholders of the cement manufacturing company.

“Kalahari has no intention of delisting EAPC from the NSE upon completion of the Proposed Transaction,” Nahdi said, adding that “Kalahari, as a long-term strategic investor, is committed to assisting EAPC in achieving its strategic objectives while deepening the capital markets regime, which is essential for Kenya’s economic prosperity.”

The proposed transaction, Nahdi noted, is intended to build long-term value for EAPC by strengthening the company’s infrastructure and providing access to additional resources. “As I have previously mentioned, Kalahari Cement, as a long-term strategic investor, will help EAPC achieve its strategic objectives through a shared prosperity model with all stakeholders, from staff, trading partners and government agencies of Kenya. At Amsons Group, we do not intend to spare any resources, financial or otherwise, in our turnaround partnership with all EAPC stakeholders.”

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The problems in EAPC

Listed on the Nairobi Securities Exchange (NSE), EAPC has been in the news for all the wrong reasons, including reports of fiscal instability, operational problems, questions about its governance structure and lately controversial sale to Kalahari Cement, which members of Parliament called “hostile takeover”.

The company has faced production problems, with reportedly difficulties in accessing limestone quarries, causing locals to deal with business management issues. At the board level, the company has faced frequent leadership disputes that experts attribute to its reduced ability to compete effectively.

Over time, former employees have taken legal action against the company, accusing management of unfair retrenchment procedures. Lately, lawmakers have questioned the sale of EAPC to Amsons Group, citing a lack of transparency, public participation and employee consultation on the purchase.

Concerns have been raised about the steep discount offered on the sale, which some suggest could be undervalued given the recent return to profits (mainly through asset revaluations) and dividend declaration. In addition, the EAPC’s valuable land holdings have been a source of significant problems, with conflicts with squatters and possible land grabs, which have sometimes turned violent.

Also read: Tanzania’s Amsons Group is expanding its footprint in the cement industry in East Africa