Businessman Benson Ndeta is set to take controlling stake of Savannah Cement after he gained regulatory approval for a deal that would increase his interest in the company by 29.4 per cent.
In a press release, the Competition Authority of Kenya said it had unconditionally okayed Mr Ndeta’s acquisition of Savannah Cement.
The agency declined to reveal details about the transaction.
Savannah Cement currently has two shareholders — Seruji with a 60 per cent stake and Savannah Heights with a 40 per cent stake. Mr Ndeta owns 51 per cent of Seruji and 35 per cent of Savannah Heights.
Sources familiar with matter told the Business Daily that following the transaction, Mr Ndeta will own 100 per cent of Seruji. Given his present holdings in Savannah Heights, this raises his effective stake in Savannah Cement to 74 per cent from 44.6 per cent.
Mr Ndeta said the changes in shareholding would have no impact on the company’s operations.
“The restructuring at the shareholder level will not see any changes at the management of the company nor its strategy,” he told the Business Daily in a telephone interview.
This latest transaction follows a 2015 deal in which Seruji bought out Chinese firms Wan Ho International and Acme Wanji who had collectively owned 60 per cent of Savannah.
Standard Investment Bank (SIB) estimates that Savannah Cement had a 15 per cent market share in Kenya last year, the fourth largest after market leader Bamburi (32.6 per cent market share), Mombasa Cement (15.8 per cent) and East African Portland Cement (15.1 per cent).
Savannah last year said it was planning to increase its annual production capacity to 2.4 million tonnes by mid-2018.
The SIB notes that expansion in capacity at a time when activity in the construction sector is depressed means that production is outpacing consumption, making it difficult to increase prices.
Data from the Kenya National Bureau of Statistics show that cement consumption fell by 62,000 metric tonnes in the first five months of 2017.