Savannah Clinker Limited has withdrawn its competing offer to acquire listed cement manufacturer Bamburi Cement Plc, the Capital Markets Authority (CMA) announced on December 4, 2024.

To facilitate reconciliation, the trading of Bamburi Cement Plc shares on the Nairobi Securities Exchange (NSE) will be suspended starting 9:00 am on December 6, 2024.

In its statement, Savannah said that the arrest of its chairman and main shareholder Benson Ndeta “led to the financier of the Competing Offer seeking additional due diligence,” and lay the blame on the CMA for refusing to extend the offer period by 60 days to enable it “respond to any queries.”

Ndeta was arrested and charged with eight counts, including involvement in a 4.5bn fraud related to his previous company, the now defunct Savannah Cement.

In October, Savannah Clinker hiked its offer for the cement manufacturer from KSh 70 per share to KSh 76.55 per share, while Amsons’ July bid remain unchanged at KSh 65.

Bamburi’s principal shareholders are Fincem Holding Limited and Kencem Holding Limited, each owning 29.30% of the cement maker. Other major shareholders include Standard Chartered Nominees with 15.68%, and Aksaya Investment Holdings Limited with 11.12%.

The tussle between the Amsons Group and Savannah Clinker for Bamburi saw the company’s share price surge to KSh 77.52 at the start of September. The stock price then dipped by 29% later that month after investors locked in the special dividend payout from the sale of a subsidiary in Uganda.

Bamburi Cement, which is considering two acquisition offers, is set to pay a special dividend of KSh 18.25 per share despite posting a loss for H1 2024.

On the upside, profit after tax from continuing operations grew by 131 percent to KSh 525 million from KSh 227 million in H1 2023. In the first 6 months of 2024, the profit before tax from continuing operations increased by 114 percent to KSh 695 million compared to prior year attributed to the several cost optimization measures and improved operational efficiency.

Turnover from continuing operations increased by 4 percent to KSh 10.9 billion compared to H1 2023 on the back of high quality premium products strategy. The unusually heavy rains in the first half of 2024 coupled with social disturbances linked to the rejection of the finance bill 2024 adversely impacted operations for the company.

Cash generated from operations increased by 51 percent to KSh 1.9 billion in H1 2024 compared to KSh 1.2 billion in the previous year resulting from  improved operating profit and efficient working capital management.

“Despite the challenging operating environment and slowdown in the market, we remain committed to our strategy and confident in our ability to deliver strong performance in 2024,” Bamburi noted in the earnings release.

Following an exit plan by the majority shareholder – Holcim – Bamburi has received two acquisition offers in a span of two  months from Amsons Group and Savannah Clinker at KSh 65 and KSh 70 respectively.

Amsons, a Tanzanian conglomerate, has received irrevocable commitment from Holcim, which owns a combined 58.6% through subsidiaries Fincem Holding Ltd and Kencem Holding Ltd. Holcim’s decision to exit African markets is in line with their portfolio optimization strategy rolled out in 2015 after merging with Lafarge. 

Bamburi Cement is listed at the Nairobi Securities Exchange under the ticker symbol BAMB. The counter closed today’s trading session at KSh 77.52, an 116.2 percent year to date gain.

On Monday, Holcim AG, a Swiss building materials company and the majority shareholder in Bamburi Cement, signed an agreement to sell its entire Nigerian business to Chinese firm Huaxin Cement for US$1 billion.

In the final quarter of 2021, Huaxin Cement completed the acquisition of Lafarge Cement Malawi and subsequently acquired a 75% stake in Lafarge Zambia for US$150 million.

Holcim has been restructuring its global business since it acquired LaFarge in 2015, beginning with the sale of units in Cote d’Ivoire, Morocco, Guinea and Cameroon in 2016. In June 2022, the 76.45% stake Lafarge Zimbabwe was acquired by Fossil Mines at US$ 29.7 million. 

In just three years (2019-2021), Holci made over US$3.1bn in divestments from the Indian Ocean cluster. It has also divested from Brazil, India, Russia, and other countries as part of its strategy to keep its books cash rich to facilitate acquisitions in other markets and sectors.

 “These divestments advance our strategy to consolidate our leadership in core markets as the global leader in innovative and sustainable building solutions,” Martin Kriegner, Regional Head Asia, Middle East & Africa said earlier.

n total, the company has made 97 acquisitions, and sold more than 20 of its subsidiaries, since 2018. It is also in the process of restructuring its North American business by separating the capital structure so it can be listed in the United States.

In November 2023, Holcim agreed to sell its businesses in Uganda and Tanzania. The company sold Hima Cement Ltd in Uganda to the Sarrai Group for an enterprise value of USD 120 million. In Tanzania, Holcim divested its 65% stake in Mbeya Cement Company Ltd to Amsons Group.

The Ugandan sale was finalized earlier this year with Holcim signing an irrevocable agreement to sell off its Kenyan business.  The conglomerate is also in the process of selling Bamburi Cement in a deal that has attracted two bids, one from Amsons Group and another from Savannah Clinker.

With the Nigerian sale in play, Holcim now has footing in Egypt and Algeria from a total of 15 African countries in 2015. The company’s biggest markets in terms of grinding capacity in Africa are Egypt and Nigeria.