The Kenyan Wall Street takes you down memory lane on some of the key mergers, acquisition, and deals that shaped 2024.
As curtain falls on 2024, this year will go down in annals of history as a period with mixed bag of challenges to individuals, businesses and the government.
The start of the year was characterized by elevated inflation, weaker shilling and high interest rates which called for extra measures to stay afloat from the volatility. Towards the end of the year, the country has however witnessed some ease albeit at a slow pace with inflation dropping from a high of 6.9 per cent in January to 2.8 per cent in November.
To ease access to loans, the Central Bank of Kenya has also lowered base lending rate to 11.25 per cent in December from a high of 13 per cent in February. Call it tough economic times or an opportunity for new business, the year 2024 also saw a number of companies restructure their businesses for growth, synergies, market expansion, and diversification.
The Courtship of Bamburi Cement
Asset: Bamburi Cement PLC
Acquirer: Amsons Group
Deal Value: KSh 23.59bn
On December 19th, Amsons Industries (K) completed its buyout deal of Bamburi Cement when shareholders of the listed cement manufacturer agreed to transfer 350.4 million shares to the Tanzanian subsidiary.
The deal, valued at KSh 23.59bn, was perhaps the most watched acquisition of the second half of 2024 and not just because it involved one of the most iconic companies in Kenya.
Amsons launched the bid KSh 65 a share in July, before Savannah Clinker placed a higher counter offer at KSh 70 a share. In October, Savannah Clinker hiked its offer to Ksh 76.55 a share, before controversially withdrawing its bid in early December. Amsons could now potentially delist Bamburi Cement, which has been on the Nairobi Securities Exchange since 1970.
Access Bank Acquires National Bank of Kenya
Asset: National Bank of Kenya PLC
Acquirer: Access Bank
Deal Value: 1.25*of book value
In March, KCB Group CEO Paul Russo confirmed that the bank was in the process of selling NBK at 1.25* its book value, to Access Bank.
Access Bank, which has been on a mergers and acquisitions streak across the continent, already has a presence in Kenya after it acquired Transnational Bank in 2019. The Nigerian lender originally wanted to acquire Sidian Bank from Centum Investments, but the deal fell through in 2023.
On 13th August 2023, COMESA’s Competition Commission approved parts of the KCB-Access deal in other markets other than Kenya, and referred the part of the transaction related to the Kenyan market to CAK. CAK has since given the deal go ahead.
Browns Investments Acquires Lipton Teas
Asset: Lipton Teas and Infusions
Acquirer: Browns Investments
Deal Value: Undisclosed
In early December, Lipton Teas and Infusions transferred its tea estates in Kenya, Rwanda, and Tanzania to Browns Investments in a deal that will also see shares totaling 15 per cent of the main Kenyan operating company offered to the communities of Kericho and Bomet.
Details of the deal says all tea sold by Browns worldwide will be grown and harvested to a new set of standards covering quality, social and environment protection, target being by 2025. The two entities will also set up a tea-specific fertilisers plant.
The two did not disclose terms of the transaction, which is subject to standard regulatory clearances. Lipton Teas and Infusion, and Brown Investments will position Kenya’s Tea as a premium product to the global stage.
Makini School’s owner ADvTECH-Ethiopia’s Flipper International School
Asset: Flipper International School
Acquirer: ADvTECH
Deal Value: US $7.5 million
Makini School’s owner ADvTECH concluded a $7.5 million agreement to acquire 100% interest in Ethiopia’s Flipper International School. The acquisition will add to ADvTECH’s international portfolio five more schools and approximately 3000 students.
Flipper International School operates five campuses located in Beklobet, in central Addis Ababa, and Summit, in the eastern part of the city. It was founded in 1998 by Menna Selamu Bekele and Serkaddis Seifu Yeteshawork.
The move marks the group’s second major expansion in the region since 2018, when the company acquired Makini Group of Schools and established Crawford International School, both in Kenya.
CFAO Motors and Kenya Vehicle Manufacturers (KVM) Limited
Asset: Kenya Vehicle Manufacturers
Acquirer: CFAO Motors
Deal Value: KSh 1bn
The Competition Authority of Kenya (CAK) approved the KSh 1 billion acquisition deal between Toyota-owned CFAO Motors and Thika-based Kenya Vehicle Manufacturers (KVM) Limited, concluding that the agreement will not impact fair competition.
CFAO Motors, now CFAO Mobility, will take control of a 98% ownership stake in KVM, as well as the responsibility to settle outstanding debts and rejuvenate operations. The government initially owned 35% of KVM, while CFAO Motors and CMC Holdings each owned 32.5% of the company.
The buyout of shares allows CFAO Motors to assemble and produce its vehicles locally, cutting out its reliance on assemblers like Simba Corps Associated Vehicle Assemblers (AVA) in Mombasa.
Ramco Inc Acquires Ramco Plexus
Asset: Ramco Plexus
Acquirer: Ramco Inc
Deal Value: Undisclosed
The Competition Authority of Kenya (CAK) approved the acquisition of investment holding company Ramco Plexus by its parent company Ramco Inc. Ramco Inc., based in Mauritius, jointly owned Ramco Plexus with Paris-based equity firm, Amethis, but it had no commercial operations in Kenya.
After Amethis exited, Ramco inc. was mandated by law to seek approval from CAK to be the sole owner of the company, as it is perceived as a merger according to the Competition Act. Ramco Plexus invests in several subsidiaries dealing with digital printing, flexible packaging, supply of paper, polystyrene, POS solutions, branded promotional gifts, and press supplies.
Before the proposed sole ownership, Ramco Plexus also held 7% of the packaging market. Its main competitors: Texplast Industries Limited, Statpack Industries Limited, and Packaging Industries Limited also own 7% of the market share each.
KEDA (Kenya) Ceramics Acquires Assets of Ramoda Ceramics
Asset: Ramoda Ceramics
Acquirer: KEDA (Kenya) Ceramics
Deal Value: Undisclosed
In September, Chinese ceramics manufacturer KEDA (Kenya) Ceramics Company increased its market share to 31 per cent following theacquisition of certain assets of its competitor Ramoda Ceramics. Ramoda had experienced liquidity challenges and closed its operations on constraints in the general business, strategic and operational divisions.
The assets comprise of a number of properties, plants and various categories of machinery and equipment which relate to the business of manufacturing, distributing and selling ceramic tiles. Ramoda Ceramics is incorporated in Kenya and is part of the Ramco Group, dealing in manufacturing, distributing and selling of ceramic tiles.
The main players in the ceramic tiles manufacturing and distribution market in Kenya include KEDA (25%), SAJ Ceramics ( 12%), Millennium (2%), Modern (2%), Goodwill (15%), and Ramoda (6%), alongside numerous importers and distributors (38%).
NCBA Completes Acquisition of AIG Kenya
Asset: AIG Kenya
Acquirer: NCBA Group
Deal Value: Undisclosed
During the year, NCBA Group announced the completion of its 100% acquisition of AIG Kenya Insurance Company Limited (AIG Kenya) from its parent company AIG Group, Inc.
The lender has held a minority shareholding in the insurer for two decades, and did not disclose how much it paid to acquire the rest of the company. It announced the acquisition plans in September 2023, and the deal had to get approvals from several regulators.
AIG Kenya is a 50- year old insurance business, with clientele cutting across multinationals, blue chip companies, small and middle-sized enterprises, and individuals. AIG Kenya established operations in 1972 as a subsidiary of the American International Group, Inc (AIG), a conglomerate with a presence in over 80 countries.
The multinational had to be bailed out during the 2008 financial crisis, which saw the Federal Reserve assuming a controlling stake before progressively selling its shareholding in the early 2010s. NCBA plans to tap into the small but sizable insurance industry valued at KSh 309bn which is growing at a compound annual growth rate of 10% even amidst ongoing macro-economic challenges.
Base Titanium- EFR Australia PTY Limited
Asset: Base Titanium
Acquirer: EFR Australia PTY Ltd.
Deal Value: Undisclosed
Competition Authority of Kenya (CAK) approved the indirect control of Base Titanium by EFR Australia PTY Limited. EFR Australia is a wholly owned subsidiary of Energy Fuels Inc (EFI), which engages in the exploration, evaluation, development and mining of Uranium, vanadium and rare earth element properties.
Base Titanium explores ilmenite, rutile and Zircon minerals in Kwale County. The transaction involves the acquisition of 100 per cent of the issued and outstanding shares in the capital of Base Limited by way of a scheme of arrangement in exchange for shares in the capital of Energy Fuels Inc.
According to the parties, the rationale for the transaction is diversification of EFR PTY’s mining business. The relevant product market for the proposed transaction is the market for titanium minerals. The target mainly exports its products to China, USA, Japan, Malaysia and Spain. It also sells some of its products locally. Base Titanium accounts for the balance – 35 per cent. The domestic market accounts for less than 1 per cent of the it’s total sales.