Amsons Group to Acquire Bamburi Cement

July 21, 2024

(3 Minutes Read)

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

Tanzanian conglomerate Amsons Group will pay Bamburi Cement shareholders USD 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.

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.