Tanzanian conglomerate to pay Kenya cement firm shareholders $5.31 million if it walks out of proposed deal

Nairobi. A Tanzanian conglomerate will pay Bamburi Cement shareholders $5.31 million (Ksh682.7 million) if it walks out of the proposed deal to acquire the Nairobi-bourse listed firm for reasons other than legal hitches.

Amsons Group, a family-run business with operations in diverse markets in East Africa, including Tanzania, Zambia, Malawi, and Mozambique, said last Thursday that the proposed deal to acquire the entire stake in Bamburi for Ksh23.59 billion includes a $5.31 million break fee.

A break fee is a penalty paid by a party who backs out of a deal or agreement with the other party involved. Firms entering into deals such as mergers and acquisitions commonly insert clauses for the party that breaches the terms and conditions to pay the termination fee.

Amsons says in a notice that if it bolts out of the transaction, the amount—about three percent of the total consideration offered—will be paid on a pro-rata basis to Bamburi shareholders, who will have accepted the offer to be bought out.

The firm said the fee would 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 deal is subject to fulfilling certain conditions, including approval from regulators such as the Comesa Competition Authority.

Bamburi is majority-owned by Holcim, a Swiss multinational company, through two investment vehicles—Fincem Holding Limited and Kencem Holding Limited—with a combined stake of 58.3 percent.

This means Holcim will be in line to receive about Ksh13.75 billion from the transaction.

The deal with Amsons could see Bamburi, one of Kenya’s iconic blue-chip companies, delisted from the Nairobi Securities Exchange (NSE), with shareholders pocketing an extra Ksh20 per share to exit, going by the Wednesday closing price of Ksh45 per share when the news of the impending deal was made public.

“Should the offer or (Amsons) achieve acceptances of 75 percent or more of the offer shares, the offeror will evaluate the continued efficacy of Bamburi remaining listed and may then, subject to approval from the Capital Markets Authority, apply for Bamburi to be delisted from the NSE,” said Amsons in a statement.

The deal comes after Bamburi in early March completed the sale of its 70 percent stake in its Ugandan subsidiary Hima Cement for an estimated $84 million to a consortium of Sarrai Group and Rwimi Holdings.

Hima Cement’s minority shareholder Cementia Holding AG also joined its sister company Bamburi in selling its 30 percent stake for $36 million (Ksh5.1 billion) to the same consortium.

Holcim last November agreed to sell its 65 percent stake in Mbeya Cement Company in Tanzania to Amsons and the deal was recently completed after receiving regulatory clearance.