Category Archives: Tullow

M&A Moment: September 2020

Since the last update of deals in the East Africa region, we are six months into the era of Coronavirus and its effects across the world.

Merger and acquisition (M&A) deal are still happening, with some older ones having been in the pipeline for months before. The impact of the pandemic has also created some new M&A deals and partnerships, while reducing the value of others, and even killing off some earlier-announced merger deals, in scenarios that had all been foreseen by deal-makers.

https://twitter.com/gina_din/status/1227504077203886081

Here are some notable deals (1 US dollar equals 108 Kenya shillings)

Airline/ Oil/Energy/Mining M&A

  • Jubilee Holdings is acquiring an additional 9.4% share in Uganda’s Bujagali Hydropower from SN Power for $40 million to now own 18.2% of the project as part of a diversified portfolio that includes quoted stocks, bonds, real estate and interests in Farmer’s Choice, PDM and Seacom. 
  • The proposal to nationalize Kenya Airways through a National Aviation Management Bill, which grew out of a proposal by the airline to manage Nairobi’s main airport, will be debated in Kenya’s Parliament over the next few months.
  • Shareholders of Tullow Oil approved the sale of its entire interest in Blocks 1, 1A, 2 and 3A in Uganda and the proposed East African crude oil pipeline System to Total. 
  • The proposed Transfer of 85% of Global Petroleum Products Kenya  to E3 Energy DMCC has been approved 
  • Barrick Gold and the Government of Tanzania have signed an agreement to launch a new joint venture to oversee the company’s future gold mining operations in the country. 
  • The Competition Authority approved the proposed acquisition of 100% of Acacia Exploration (Kenya) by Shanta Gold Mauritius.
  • Safaricom bought 18.96% of Circle Gas for Kshs 385 million. The gas company has interests in Tanzania also acquired KopaGas’s technology in a $25 million transaction, one of the largest private equity investment in the clean cooking sector. 
  • In what will be a controversial deal, Kenya plans to have the Industrial and Commercial Development Corporation become a super agency to oversee a new Kenya Transport and Logistics Network (KTLN) that will coordinate the Kenya Ports Authority, Kenya Railways and Kenya Pipeline Company.
  •  Deal Undone: The Competition Authority has noted that the acquisition of 80% of the Embraer by Boeing has failed to take place following the decision of the parties to withdraw from the transaction. 

Banking and Finance: Finance, Law, & Insurance M&A

Kenyan Banks  

  • Kenya’s Central Bank approved the acquisition of 51% of Mayfair Bank by Commercial International Bank, Egypt’s leading private sector bank, and it will be renamed as Mayfair CIB Bank.  
  • The Central Bank of Kenya approved the takeover of 90% of Jamii Bora Bank by the Cooperative Bank of Kenya.
  • Access Bank completed the acquisition of 100% of Transnational Bank. 
  • Centum’s Bakki Holdico has acquired all the shares of the late Ambassador Bethuel Kiplagat in Sidian Bank (via Business Daily) 
  • Equity Bank has completed its buyout of 66.53% BCDC in DRC. Covid saw the final price reduced by $10 million to $95 million.  
  • Deal undone: Atlas Mara and Equity Bank mutually agreed to discontinue transaction discussions given the effects of the COVID-19 pandemic.
  • Deal undone? Businessman Naushad Merali and Mwalimu National Sacco plan to sell their stakes in Spire Bank after it issued a notice to engage potential suitors to buy a 100% of the bank. 

Investment Markets and Deal Makers

  • The Nairobi Securities Exchange acquired 61% of AKS Nominees, which holds an 18% share in the Central Depository and Settlement Corporation (CDSC) for Kshs 77 million.
  • Genghis Capital has partnered with EGM Securities to offer investors a wider range of alternative asset classes including online currencies, commodities, precious metals, oil, and biotech stocks.
  • Helios & Fairfax to partner on Africa investments. 
  • Fanisi Capital and Ascent Capital are set to merge and raise funds for bigger deals in the region.
  • Two Nairobi stockbrokers AIB Capital and Apex Africa entered a joint venture that will lead to a merger. The entity will be part of Mauritius firm, the AXYS Group which acquired Apex in 2015.
  • African Alliance Kenya investment bank is divesting from stockbroking owing to a structural decline in the agency trading model in both the local and global financial markets (amplified by the Covid-19 pandemic)

Insurance

  • The Competition Authority approved the acquisition of 24.1% of ICEA Lion Insurance Holdings by Eastern Africa Holdings which is being used by private equity firm Leapfrog Investments for the buyout of  ICEA Lion Insurance Holdings for Kshs 10 billion.
  • The sale of Stanlib Kenya to ICEA Lion was approved by the Competition Authority though clients have pulled out Kshs 75 billion following the deal. 
  • Mauritian insurance company MUA completed the acquisition of Saham Assurance Company Kenya. 
  • Octagon Africa, who offer pension, actuarial and insurance services in Kenya, Uganda and Zambia acquired a 49% stake in the Zambia subsidiary of Alexander Forbes who doing a group strategic review. 
  • EDIT: Allianz will acquire controlling stakes in Jubilee Insurance’s general insurance business (property & casualty insurance) in Kenya, Tanzania and Uganda as well as the short-term insurance business in Burundi and  Mauritius for Kshs 10.8 billion ($ 100 million) while Jubilee will also acquire Allianz Insurance Kenya.  

Regional Banks

  • The Tanzania Postal Bank (TPB) has absorbed a third bank, TIB Corporate, in a new merger deal. 
  • The National Bank of Malawi plans to invest in Akiba Commercial Bank in Tanzania in a bid to expand its operations beyond Malawi.
  • The Bank of Tanzania approved the merger of Mwanga Community Bank and Hakika Microfinance Bank to form the Mwanga Hakika Microfinance Bank. 
  • EFG Hermes and the Sovereign Fund of Egypt aim to acquire 76% of the Arab Investment Bank. EFG Hermes will own 51% of the bank and plans to transition from an investment bank to a commercial bank. 
  • I&M Bank is buying Orient Bank in Uganda.  edit The deal in which I&M Holdings acquired 90% of Uganda’s 12th largest bank from 8 miles LLP and Morka Holdings was completed in April 2021. Through the acquisition, I&M Group has acquired additional net loan assets of approximately KES 7.7 Billion, deposits of KES 18.2 Billion, a customer base of close to 70,000, a staff component of 340 employees and a network of 14 branches and 22 ATMs across the country.

Remittances

  • WorldRemit has agreed to acquire Sendwave, an app-based remittance company in a cash and stock transaction. 
  • Beyonic has been acquired by MFS Africa.  

Agri-Business, Food & Beverage M&A

  • Kenya has floated an international expression of interest for the privatization of five sugar firms. 
  • The Kenya Tea Development Agency Limited (KTDA) and the Japan International Cooperation Agency (JICA) are each investing over Kshs 150 million to set up Africa’s first Japanese speciality green tea production factory at Kangaita Tea Farm in Kirinyaga County. 
  • President Kenyatta has ordered the Kenya Meat Commission to be transferred from the Ministry of Livestock to the Ministry of Defence
  • Dominion Farms on a parcel of land comprising 3,700 hectares at Yala Swamp in Siaya County is being transferred to Lake Agro Ltd.
  • edit Nathan Kalumbu has acquired control of Interstrat Ltd (Big Square Kenya) which has assets worth Ksh 689 million.
  • edit The Competition Authority has approved the acquisition of Dilpack Kenya by Elgon Kenya and the companies will from March 2020 will jointly service the East African market with packaging solutions for the horticultural and floricultural industries.
  • edit The Competition Authority has approved the acquisition of Marsyetu Ltd by Mija Ltd. 

Health and Medical, Pharmaceutical M&A

  • Indo-Oceania Ventures is acquiring Mayfair Healthcare Holdings
  • The CDC Group and Novastar Ventures have invested in mPharma which currently operates in Ghana, Nigeria, Kenya, Zambia and Zimbabwe, and serves approximately one million patients annually, through a network of over 400 pharmacies.
  • edit Goodlife Pharmacy, which had a turnover in 2018 of Kshs 936 million, is acquiring assets of Salama Pharmaceuticals which had a turnover of Kshs 13.3 million and Eurose Enterprises which had a turnover of Kshs 9.8 million in the same years.

Logistics, Engineering, & Manufacturing M&A

  • Mum’s Village Kenya has merged with BabyBliss Nigeria to create the Bliss Group Africa. 
  • Portuguese multinational Salvador Caetano Group has invested Kshs 350 million to launch an automotive hub in Kenya and be the dealer for Renaultand Hyundai cars with plans to venture into the local assembly of the two brands.
  • Bolt, the ride-hailing app, has received a EUR 50 million as venture debt facility from the European Investment Bank to support its research and development strategies.
  • Kenyan e-commerce startup AfricaSokoni has acquired Nigeria company Bolorims to expand into the West African country. The deal, which gives Bolorims a 10% cent stake in AfricaSokoni, creates a new entity in Nigeria, Bolosokoni.com, with AfricaSokoni continue to trade as before in Kenya. 
  • edit Evo Pack Ltd is acquiring Kshs 234 million worth of assets of Digital Packaging Innovation Holdings.
  • edit The Competition Authority has approved the acquisition of certain assets of Bamburi Special Products, a wholly-owned subsidiary of Bamburi Cement, by Yellow House Ltd. .. the deal was terminated by the parties in December 2020
  • edit The Competition Authority has approved the acquisition of 25% of Macquarie Airfinance Limited by Sunsuper Pty.
  • edit The Competition Authority has approved the acquisition of Ignazio Messina and C.S.P.A and Roro Italia S.R.L by Marinvest S.R.L on condition that Ignazio Messina East Africa business continues to operated and managed independently of Marinvest.
  • edit Shareholders of NSE-listed Nairobi Business Ventures approved the sale of 84% of the firm to Delta International FZE of Dubai, for Kshs 83 million, pending regularity approval.

Real Estate, Tourism, & Supermarkets M&A

  • LSE-listed Network International Holdings is to acquire Nairobi-headquartered DPO Group for $288 million worth of shares of Network. The firm whose payment services are used in 19 African countries, was affected by COVID disruptions of travel and the tourism sector. DPO’s founders will get $13m worth of shares and Apis Growth Fund receives $50m of shares in Network. 
  • PrideInn Group has acquired Azure Hotel and re-opened the Kshs 1.2 billion Westlands hotel that suspended operations in March during the pandemic.  
  • Cloud9xp, an online booking service for leisure experiences and an alumnus of Nairobi Garage, has been acquired by Kenyan-based travel-tech outfit HotelOnline in a share swap deal. 
  • Tusker Mattresses announced plans to recapitalize through the sale of a majority stake that is supported by seven shareholders in its Orakam parent company. But it’s not clear if this will be enough to save the struggling retailers that initially tried to secure short-term supplier support through ring-fencing of payments.  
  • Slumberland Kenya is being transferred to Simba Foam.
  • Deal undone: Tiffany & Co. has filed a lawsuit to compel LVMH Moët Hennessy-Louis Vuitton to complete a merger transaction on earlier-agreed terms, noting that COVID-19 has not prevented other parties from concluding similar deals 
  • edit The Competition Authority has approved the acquisition of control Of Kingdom 5-KR- 185 Ltd by Madison Hotels and Resorts. The Business Daily has this story of the sale of hotels between billionaires by Prince Al-Waleed bin Talal to Binod Chaudhary.

Telecommunications, Media & Publishing M&A

  • Edelman, the largest independent global communications firm, has expanded its African footprint with the acquisition of Gina Din Corporate Communications. 
  • Scangroup completed a long-standing deal after a special EGM in May 2020 saw 88% of its registered shareholders participate and vote 99.98% in its favour.
  • Safaricom and Vodacom have acquired control of M-Pesa in Africa from Vodafone for Kshs 2.15 billion, with each firm paying 50% of the amount (Kshs 1.07.billion) as their share of the joint venture. 
  • Tigo has combined with Zantel. The Tanzanian firms have a combined 12.8 million customers and 7.4 million mobile money users.
  • Mettā and Nairobi Garage are combining their services to create Kenya’s largest innovation community, offering access to all their networks, while members will have access to both organizations’ workspaces throughout Nairobi and the complimentary business support services
  • Nigeria’s CcHub acquired Kenya’s iHub to create a mega Africa incubator.
  • edit French media company Groupe Canal+ SA has acquired a 6.50% stake in Multichoice Africa. This comes after Canal+ acquired African film and television studio ROK in 2019.
  • Deal undone: Telkom Kenya and Airtel have mutually agreed to end their pursuit of a joint venture. This came after conditions were raised that delayed the deal.  
  • edit The Competition Authority has approved the acquisition of 20% of Icolo Limited By Prif Africa Holding.
  • edit Autochek.Africa is buying out Ringier One Africa Media’s Cheki and will operate in Nigeria, Ghana and Kenya where Cheki runs new and second-hand car sales, car importation services, car loans and financing.

Other M&A

  • Sport: The legendary Williams F1 racing was taken over by US investment firm Dorilton Capital. Covid and a sponsor departure were triggers for the deal. 
  • Foreign Aid: The United Kingdom, which is leaving the European Union, plans to merge the Department for International Development and the Foreign and Commonwealth Office – to become the Foreign, Commonwealth and Development Office.
  • Art: The art prize collection of the bankrupt Abraaj Group was acquired by a Saudi art organization Art Jameel and will be hosted at their space in Dubai. 

Tullow Oil East Africa updates

A few weeks ago Tullow Oil gave an update of their half year results with operational updates for different countries including Kenya and Uganda.

  • Uganda: Tullow sold a stake in its Uganda oil development to Total Oil for $900 million ($200m cash – $100m on completion, $50m at FID, $50m at first oil, $700m in deferred consideration), and will retain 10% of that and also of a $3.5 billion pipeline through Tanzania. The statement mentions inter-governmental agreements signed to secure pipeline routing and commence key commercial agreements and last week, Tanzania and Uganda announced the commencement of the construction of a $3.55 billion, 1,445 kilometre-long oil pipeline that will be completed in three years.
  • Ghana has sustained low-cost production due to an absence of drilling in 2017.
  • Kenya: The Implementation experience of the early Tullow early oil pilot scheme will assist the Tullow oil joint venture, Kenya Government and Turkana county to prepare for full field development (however a previous plan to transport oil by truck had been shelved before the elections amid a dispute of sharing oil revenue). 
  • South Lokichar Basin: 14 exploration prospects drilled, 11 oil accumulations discovered – estimated billion barrel basin potential.
  • Other Tullow oil exploration is ongoing in Ghana, Namibia, Zambia, and Mauritania as well as in South America.

M&A Moment: July 2017

Various recent deals in the last few weeks and months in East Africa – compared to 2016 and 2015

Banking and Finance: Finance, Law, & Insurance

  • Commercial Bank of Africa (Kenya) is acquiring 100% of Crane Bank Rwanda from DFCU of Uganda
  • Direct Pay Online Group acquired 100% of Virtual Card Service in Botswana and Namibia. This will be followed by the acquisition of 100% of VCS business in South Africa (via Balancing Act Africa)
  • Chase Bank suitors announced by the Business Daily – are led by Societe General, and State Bank of Mauritius (who have also just completed the acquisition of Fidelity Bank)
  • Barclays PLC sold 22% of Barclays Africa
  • KCB was linked to another bid for NBK, although the CMA denied any knowledge of such a deal.
  • Kuramo Capital, the largest shareholder of Transcentury is acquiring 25% of Sterling Capital stockbrokers, the second largest bond trader in the country
  • Diamond Trust to acquire Habib Bank Kenya for shares worth Kshs 1.82 billion (~$18 million). EDIT At the end of July, the Competition Authority approved the deal on condition that Diamond Trust retains at least 41 employees of Habib Bank post-transaction and the Central Bank communicated that the deal would be concluded on 1st August when Habib would cease to exist as a licensed bank.
  • The Competition Authority of Kenya has authorized the proposed acquisition of a minority stake of 10.68% of I&M Holdings by CDC Group PLC together with certain veto rights.
  • I&M Holdings also has announced the successful completion of a merger with Giro Commercial Bank
  • Carlyle to acquire Global Credit Rating Co. (South Africa)
  • Letshego Holdings Limited (Botswana) acquires afb Ghana
  • Atlas Mara to acquire 13.4% equity in United Bank Nigeria, from Clermont Group for $55 million, increasing its stake to 44.5%
  • Sanlam Group has completed the acquisition of a majority stake in PineBridge Investments East Africa Limited. PIEAL is a leading asset management company in East Africa with operations in Kenya and Uganda – and the competition authority approved this at the end of July.
  • EDIT Alexander Forbes Kenya to change name & brand (to Zamara) after a change of shareholding to comply with new pension law that caps foreign ownership to a maximum of 40%.

Beauty & Pharma/Chem

  • The Competition Authority of Kenya authorized the acquisition of Dan Pharmacie by Mimosa Pharmacy.
  • The Competition Authority of Kenya authorized the acquisition of Sole Control of Syngenta AG (Syngenta) by China National Agrochemical Corporation (CNAC).
  • The Authority excludes the proposed acquisition of 72% of the issued share capital of Chemserve Cleaning Services Limited by Eye Level Exposure Limited from Part IV of the Act .. (their) combined turnover of KSh. 138,076,904 is below the required merger threshold for mandatory notification
  • Abraaj Group gets approval to acquire 75% of Healthlink Management (Nairobi Women’s hospital?)
  • The Competition Authority of Kenya has approved the proposed acquisition of 100% of the issued share capital of Monsanto Kenya by Bayer Aktiengesellschar/KWA Investment. Businessman Chris Kirubi revealed that he holds a 45% stake in agrochemical firm Bayer East Africa.
  • The Competition Authority of Kenya has authorized the proposed acquisition of the shares in the Dow Chemical Company by Dowdupont Inc. and the Competition Authority of Kenya has authorized the proposed acquisition of the shares in E. I. Du Pont De Numerous and Company by Dowdupont Inc.
  • A local drug store is set to be acquired for Sh. 2 billion. Imperial Health Sciences, which based along Mombasa Road will be acquired by South African investment firm Mara Delta Property Holdings. “The facility will be leased back to Imperial Health Sciences on a 10-year triple net basis, denominated in US$ and guaranteed by Imperial Holdings Limited.”
  • The Competition Authority of Kenya authorised the acquisition by Kibo Plastic Packaging of a minority (14.02%) shareholding with controlling interest in Blowpast Limited.
  • EDIT Japanese Kansai Plascon Africa has acquired local paint maker Sadolin for Kshs 10 billion.

Food & Beverage

  • Africa’s largest Coca-Cola bottler- Coca-Cola Beverages Africa Proprietary Limited (CCBA) has acquired Equator Bottlers, the third largest Coca-Cola bottler in Kenya. Equator Bottlers, was previously a subsidiary of Kretose Investments Limited owned by the Shah family, has been one of several authorized Coca-Cola Bottlers, which supply products in the Western regions of Kenya. It was established in 1966 and is based in Kisumu. EDIT  At the end of July, the Competition Authority authorized the deal on condition that the merged entity retains at least 2,279 employees post-transaction and that Coca Cola file a compliance report in two years.

  • The Abraaj Group is to acquire 100% of Java House Group from Emerging Capital Partners – the story was first broken at Wallace Kantai’s blog and the deal is said to be worth about $130 million. Java House Group was established in Nairobi in 1999. In 2012, Emerging Capital Partners acquired a majority stake in the Company, with the founder retaining a minority stake. ECP has helped Java House grow from 13 shops in Nairobi into East Africa’s largest casual dining brand, building an ‘eat-out’ culture. Today, it has an unrivalled regional footprint of 60 stores across 10 cities in Kenya, Uganda and Rwanda.
  • Catalyst Principal Partners has, through a newly established firm, Britania Foods Limited, acquired the business and operations of Jambo Biscuits Ltd, being a leading biscuits manufacturer in Kenya with its flagship “Britania” brand.
  • The Competition Authority of Kenya authorized the acquisition of assets of Wanainchi Marine Products (Kenya) by One Holdings.
  • The Competition Authority of Kenya authorized the acquisition of Sosco Fishing Industries by One Holdings.
  • Distell, Africa’s leading producer of spirits, wines, ciders and ready-to-drinks (RTDs) continues to ramp up its investment on the African continent, with the acquisition of a further 26.43% in KWA Holding East Africa Limited (KWAL), Kenya’s foremost spirits manufacturer and distributor, from Centum Investment Company Limited. The African liquor giant now owns a majority shareholding of 52.43% in KWAL, having previously acquired a 26% stake from Industrial and Commercial Development Corporation (ICDC) in 2014.
  • Netherlands-based private equity firm DOB Equity announced that in which in December 2016 that it had acquired a stake in Kenya’s Countryside Dairy, a Nyahururu-based facility with a processing capacity of 100,000 litres of milk per day.
  • Amethis and Metier to acquire East African FMCG firm, Kenafric Industries.. Two private equity funds have bought a 40% minority stake in Kenafric Industries as the firm eyes regional growth…popular products under the confectionery and culinary segments include Fresh brand of chewing gum and Oyo food additive. It also manufactures snacks and ready-to-drink juices at its plant in Nairobi’s Baba Dogo. The business, started 30 years ago by Velji Punja Shah and his four sons, is looking to increase its coverage of other East African countries, saying it currently sells 45% of its products outside Kenya.  
  • EDIT: The Competition Authority of Kenya has authorised the proposed acquisition of indirect control of Weetabix East Africa by Post Holdings through its wholly-owned subsidiary, Westminster Acquisition.
  • EDIT:  Twiga Foods, the Kenyan business-to-business food supply platform announced today that it has successfully raised a Series A funding round including $6.3 million in equity and $4 million in debt instruments.
    • The round was led by Wamda Capital and includes Omidyar Network, DOB Equity, Uqalo, 1776, Blue Haven Initiative, Alpha Mundi, and AHL.
    • Today, Twiga is the largest distributor of several basic food staples in Kenya, having sold over 55 million bananas alone and delivering over 4,000 orders a week.
    • Additional to the Series A round closing, Twiga closed some $2 million in grant funding from USAID, GSMA, and others to support bolt-on farmer services, financial inclusion, and first of their kind domestic food safety initiatives.

Hotels/Tourism

  • Simba Corporation acquired a 35% minority stake in Hemingways Holdings and plans to grow from its current three properties: the Olare Mara and Villa Rosa managed by world leading hoteliers, Kempinski, and Acacia Premier Kisumu, as Hemingways is the parent company of three iconic properties that represent the definitive portfolio of luxury travel in Kenya: Hemingways Watamu, Ol Seki Hemingways Mara and Hemingways Nairobi. The transaction also includes Express Travel Group, a subsidiary of Hemingways that provides comprehensive and high quality travel management services through its international franchise partnerships with American Express Global Business Travel and Europcar International as well as through Hemingways Expeditions, a premium Destination Management Company. EDIT: The competition authority approved the deal at the end of July.
  • The Competition Authority of Kenya authorized the proposed acquisition of control of Abercrombie & Kent Kenya (Abercrombie) by Yan Zhao Global, from A&K Cayman L.P and other minority shareholders
  • Thomas Cook India acquired Kuoni Travel specialists in 17 countries (includes Private Safaris E.A. in Kenya)
  • Accor Hotels will relaunch Tune hotel under the ibis Styles brand.
  • Older hotels – 680 and Boulevard, two older iconic Nairobi hotels have been recently bought by the Deputy President, William S. Ruto.

Logistics, Engineering, & Agri-Biz

  • Isuzu will become a 57.7% shareholder in Isuzu East Africa through the purchase of General Motors’ shareholding in the business. The other shareholders will remain as Kenya’s Industrial and Commercial Development Corporation (20%), Centum Investments (17.8%) and Itochu Corporation (4.5 %). EDIT: At the end of July, the Competition Authority of Kenya authorised the deal on condition that the merged entity absorbs all 383 GMEA employees, continues after-sales service of all the vehicle brands, Isuzu and Chevrolet sold and leased by GMEA for duration of all the after-sales service contracts, honours all existing dealership agreements between GMEA and its dealers, and communicates to all GMEA customers on the continuation of after-sales service.
  • The Competition Authority of Kenya authorized the proposed subscription for 24.99% shareholding in Trans-Century with 100% of the redeemable preference shares in TC Mauritius Holdings by Kuramo Africa Opportunity Kenyan Vehicle.
  • The Competition Authority of Kenya authorized the transfer of 50% of the issued shares in Safal Building Systems to Mabati Rolling Mills.
  • The Competition Authority of Kenya has authorized the proposed acquisition of 100% of Kenya Kazi by Gardaworld
  • Rift Valley Railways (RVR), the company that runs the century-old Kenya-Uganda railway, has moved to court in a last-minute effort to stop the concession manager, Kenya Railways Corporation (KRC), from terminating its 25-year contract.
  • The Competition Authority of Kenya has authorized the proposed acquisition of Reunert Limited of 75.39% of the ordinary shares in Metal Fabricators of Zambia PLC.
  • The Competition Authority of Kenya has authorized the proposed acquisition of 40.7% of the ordinary shares and control of ARM Cement Limited by CDC Africa Cement.
  • Crown Paints to buy back 15% of its stock, the first company to do this.. now allowed by Kenya’s new companies law.
  • EDIT Athi River Mining is selling its Mavuno Fertilizer subsidiary to Omya and Pinner Heights to focus on its cement business.

Oil/Energy

  • German-based solar electrification firm Mobisol has acquired pay-as-you-go off-grid (PAYG) solar industry software firm Lumeter.
  • Hass Petroleum sold a 40% stake to Oman Trading International to fund growth in Eastern Africa
  • Tullow Oil plc sold stakes in Uganda to Total Oil for $900M, and will retain 10% of that and of a $3.5 billion pipeline through Tanzania
  • Vitol Africa gets approval to acquire 19.91% of Vivo Energy from Shell Overseas Investments
  • The Competition Authority of Kenya has authorized the proposed acquisition of indirect control in Dalbit Petroleum by Humphrey Kariuki Ndegwa.
  • The Competition Authority of Kenya has authorized the proposed acquisition of the retail petroleum business of Hashi Energy by Lake Oil
  • The Competition Authority of Kenya has authorized the proposed acquisition of the retail petroleum business of Hashi Energy Limited by Lake Oil Limited
  • The Competition Authority of Kenya has authorized the proposed acquisition of 100% of Gulf African Petroleum Corporation by Total Outre-Mer S. A. on condition that Total Outre-Mer S. A. comply with the following hospitality and employment conditions— including All agreements remain in force with relation to the Mombasa Terminal; and the merging parties are limited in the termination of employees of Gulf African Petroleum.
  • PIC South Africa will take up all shares not taken up in the Kengen Kshs 4.4 billion on offer. The South African government employees pension giant with $133 billion of assets will take up 351.2 million new shares at Kshs 6.55 each (totaling Kshs 2.30 billion) as other shareholders get diluted by 5.33% each e.g. The Kenya Government which was a 74% shareholder before, will have 70% afterwards.

Real Estate & Supermarkets

  • The Competition Authority of Kenya authorized the proposed joint venture between Helios Investment Partners and certain shareholders of Acorn Group.
  • Cytonn Investments Management (Kenya) to acquire a $10 million stake in Superior Homes.
  • Konza Tech City is seeking investors to apply for land to build campuses, BPO’s, offices, hotels, and student housing etc.
  • China Wu Yi acquires Sh530m Kilifi land.
  • In April last year, Mara bought a 45.5% stake in Naivasha-based Buffalo Mall for Sh. 440 million. Mara has valued its investment in Buffalo Mall at $6 million (Sh. 603 million), implying a capital gain of Sh. 163 million in less than a year. The mall now brings in 2% of the multinational’s total revenues and represents 2% of its assets. The property is however yet to make a profit, with the six months ended December showing a pre-tax loss of Sh.2.8 million.
  • EDIT  Uchumi expects to conclude a deal with an investor that is worth Kshs 3.5 billion of new shares.

Telecommunications, Media & Publishing

  • Vodafone sold a 35% stake in Safaricom to South Africa’s Vodacom (link)
  • The Competition Authority of Kenya has authorized the proposed acquisition of certain passive infrastructure of East Africa Towers by Kenya Towers.
  • Catalyst Principal Partners has acquired a significant minority interest in Kensta Group, a 52-year-old East African printing and packaging company Kensta Group manages a diverse set of companies within East Africa namely Transpaper (Kenya, Uganda, Tanzania, Rwanda), Express Automation (Kenya, Uganda, Tanzania, Rwanda), Vivid Printing Equipment, Fusion Inks, Zenith Rubber Rollers and Phiramid (Zambia).
  • Kenyan IT multinational Craft Silicon has acquired a Sh51.5 million minority stake in restaurants listing portal EatOut, marking its second major backing of a local tech company. Craft Silicon is a founder-shareholder of Little, which is also backed by local telco giant Safaricom. (via Business Daily)
  • Deal undone: Ghafla Kenya CEO Samuel Majani spoke about how a Ghafla merger with Ringier unraveled and on a lot of the intricacies of the issues such as exclusivity, assets & liabilities, dealing with partners & other shareholders, and on merging staff, customers & systems.
  • Deal undone: a Merger with JamboPay was unstuck after a court finding, and the founder of JamboPay, the firm that supplies Nairobi County’s e-payments platform, won a protracted battle against a rival firm over use of its trade name.
  • Mara Social Media acquired global Instant Messaging & communications platform “Nimbuzz” which has over 200 million users and is available for Android, iPhone, and Symbian, MIDP, Windows Phone, BlackBerry and PC & MAC clients
  • Film Studios has been acquired by MoSound
  • MTN is to acquire MultiChoice Africa – owners of @DSTV & GoTV
  • EDIT The Competition Authority authorised the proposed acquisition of fibre optic cable from Bandwith  & Cloud Services Group by Safaricom.
  • EDIT Safaricom’s $1 million Safaricom Spark Venture Fund announced its sixth and final investment in agri-tech startup iProcure – which seeks to increase agricultural output in Kenya, which has remained comparatively low to other countries due to challenges including access to and use of quality inputs. Other invests include FarmDrive, Sendy, and mSurvey.
  • EDIT IFC invests Sh619m ($6 million) in mobile tech firm Africa’s Talking with the funds earmarked for the company’s expansion in Africa beyond the current seven markets where it has a presence.

Other

  • The Competition Authority of Kenya has authorized the acquisition of Section Investment by Kisima Management.
  • The Competition Authority of Kenya has authorized the proposed acquisition of 43.8% of Kinetic Holdings by Catalyst Kinetic Investments.

$1 = Kshs 103

Tullow to truck Oil from Turkana to Mombasa

Tullow Oil has an advert in the newspapers today seeking suppliers to help it transport oil from  Lokichar, Turkana to Mombasa. There are two requests:

  • For registered truck companies in Kenya, that have new vehicles, and experience transporting hazardous material.
  • The other is for a lease of 100 pressurized insulated containers of 25,000 litres each. (Presumably, these T11 standard containers can also be transported by railway).

There is a bit of regional and domestic politics here. While Uganda seems to have opted to refine its oil and ship it out via a pipeline in Tanzania, Kenya wants to show that it can deliver on that in the short-term.

Trucks on a highway (via AfricaKnows.com)

Trucks on a highway (via AfricaKnows.com)

Also, the Jubilee government is checking off all its pre-election promises and while the one to prioritise the construction of an oil pipeline from South Sudan and a new oil refinery at the coast may not materialize, expect by the August 2017 elections to have a barrel of Kenyan oil shipped out from Mombasa, regardless of the means of transport or the cost of production.

Once oil is trucked to the coast, the long-term picture could see a lowering of the costs and perhaps  re-engagement by other countries in the region on the suitability of shipping oil through a pipeline in Kenya.

Shares Portfolio: November 2015

Comparing performance to last quarter and a year ago, the portfolio is down 10% in the last three months, while the while the NSE 20 share index is down 4% since August 2015, but down 23% since last November.

The Stable

snoop

Atlas ↓
Barclays
Bralirwa (Rwanda) ↓
Centum (ICDCI) ↓
CIC Insurance ↓
Diamond Trust ↓
Equity ↑
KCB ↓
Kenya Airways ↓
Kenya Oil ↓
NIC ↓
NSE ↑
Stanbic (Uganda) ↓
TPSEA ↓
Unga ↓
Summary
  • For the second quarter, in a row, everything is down, except the NSE share price itself, followed by Equity Bank which is marginally!
  • In: Barclays, Stanlib Fahari (I-Reit)
  • Out: Safaricom, Scangroup, Mumias
  • Increase: Equity Bank, NIC
  • Decrease: None
  • Best performer: NSE (up 20%)
  • Worst performer: Atlas (down 73%) ,Bralirwa, Kenya Airways.
  • Unexpected Events: (1) Atlas bankruptcy, though the warning signs were there with the slowdown of exploration activities. It is mainly owed money by Tullow Oil and the Geothermal Development Company (GDC) (2) The collapse of Imperial Bank, which has had a knock on effect on other bank shares. (3) Kenya Airways half year results.