Amsons Group’s Sh475 billion bid for Kenyan cement firm set to sail through

Dar es Salaam. The decision by Tanzania’s Amson Group to make a $180 million (about Sh475 billion) bid to acquire Kenya’s Bamburi Cement sends a clear message that Tanzania was now strategically positioned to make its economy competitive, analysts said on Thursday.

Amsons Group announced its intention of acquiring Kenya’s Bamburi Cement early last month in a move that, if concluded, would become one of the biggest takeover deals in East Africa and create a giant cement producer in the region.

The firm is a family-run business with operations in Tanzania, Zambia, Malawi, Mozambique, the Democratic Republic of Congo and Burundi.

Reports show that the deal has since received the backing of the major shareholders of Bamburi Cement, including Holcim, the Swiss-based global building material and aggregates’ company which owns a 58.6 percent of Bamburi’s total issued share capital through Fincem Holding (29.3 percent) and Kencem Holding Ltd (29.3 percent).

Back home, the deal has also received the backing of key government and private sector bodies which believe that once approved, it would send a good picture of the capacity of Tanzania’s firms to invest massively outside the country.

Apart from independent analysts, the Tanzania Private Sector Foundation (TPSF) and Tanzania Investment Centre (TIC) have spoken highly about the deal.

TPSF Chief Executive Officer Raphael Maganga said in Arusha on Thursday that the deal was a clear indication that Tanzania’s economy was growing and the government was putting in place an enabling environment for the private sector to thrive.

“Firstly, it is crucial to understand that over the past three years, since the Sixth Phase Government led by President Samia Suluhu Hassan came into power, Tanzania’s economy has demonstrated robust growth….This upward trend reflects the resilience of investors in recognizing and seizing opportunities, as well as a rise in investments across various sectors,” said Mr Maganga.

He said the economic growth means that there has been an in the national income and the number of billionaires in the country.

“Notably, the recent acquisition of a major company for $180 million by a Tanzanian investor highlights the ability of Tanzanian companies to compete internationally, reflecting the strength of Tanzania’s economy and favorable conditions for investors. This development signals the maturity of our economy and the emerging dynamism among local investors. The bold move by Amsons Group under the leadership of Edha Nahdi represents a significant milestone for Tanzanians in the realm of investment,” he said.

He said personally, he did not anticipate that within these recent years, a Tanzanian would emerge with the vision and courage to make such a substantial investment, either within or outside Tanzania. “I expected such developments to occur much later, perhaps around 2040. However, Tanzania has managed to achieve significant milestones in investment within a short period, demonstrating progress ahead of the projected timeline,” he said.

Supporting such moves, Mr Maganga said, were sound policies that the government has put in place.

“These policies have assured investors of Tanzania’s safety and openness for business. The policies, including improvements in transportation infrastructure such as the central railway, aviation, and road expansion, have enhanced the investment climate, increasing both national and investor income…,” he said.

Investors’ confidence in the economy, he said, has greatly improved.

“The government’s transparent systems and reliable performance have inspired local investors to recognize and harness their potential,” said Mr Maganga, congratulating Amsons Group and its director, Mr Edha Nahdi for the decision.

“At only 37, Nahdi is an exemplary figure demonstrating significant business acumen and vision…,” he said.

TIC Executive Director Gilead Teri share similar sentiments, hailing the cross-border expansion as a positive indicator of the country’s business environment. “The government has implemented effective policies that empower businesses to grow beyond our borders,” he said.

Independent analysists say the decision would enhances cross-border relationships and contribute to a more resilient economy.

In separate statements to The Citizen, Institute of Management and Entrepreneurship Development chief executive Donath Olomi said that the move highlights the growth and expansion of the private sector beyond borders for profit.

“The private sector is strengthening and expanding its business scope, which brings significant rewards,” Dr Olomi said. He noted that the acquisition will enable the company to secure loans and establish relationships with suppliers in Kenya, thereby contributing to a more resilient economy, particularly during times of economic turbulence in Tanzania.

However, Associate Professor of Development Economics at the University of Dar es Salaam, Dr Abel Kinyondo, said that while the acquisition could be driven by the company’s expansion strategy, it might also reflect Tanzania’s regulatory environment.