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The Competition Authority of Kenya (CAK) has clarified it did not approve Kalahari Cement's acquisition of a stake in East African Portland Cement Company (EAPC), stating it lacks the legal mandate for such a transaction. This denial comes as Parliament's Trade Committee probes the controversial deal, citing concerns over public interest and valuation.
The Competition Authority of Kenya (CAK) has denied approving the acquisition of shares in East African Portland Cement Company (EAPC) by Kalahari Cement Ltd. The CAK stated on Thursday, October 3, 2025, that it does not possess the legal mandate to approve such a transaction.
This clarification emerges amidst intense scrutiny from the National Assembly's Trade, Industry and Cooperatives Committee, which is currently investigating the proposed sale. Members of Parliament have raised significant concerns regarding the deal's transparency, valuation, and potential impact on public ownership of a strategic national asset.
Kalahari Cement Limited, a special purpose vehicle backed by Pacific Cement Ltd and entities linked to businessman Ebrahim Abdullah Munif, signed binding agreements to acquire a 28.2% stake in EAPC from Associated International Cement Ltd (AIC) and Cementia Holding AG. These two entities, affiliated with Holcim, agreed to sell their combined 26,324,884 ordinary shares at KSh 27.30 per share, totaling approximately KSh 717 million. This price reportedly represents a 42.5% discount to EAPC's closing price of KSh 47.50 on the Nairobi Securities Exchange (NSE) on July 31, 2025.
The Capital Markets Authority (CMA) had, on August 5, 2025, approved the proposed sale, granting an exemption from mandatory takeover rules. However, the transaction remains subject to further regulatory approvals, including clearance from the Competition Authority of Kenya and the Ministry of Mining due to EAPC's mining licenses.
Under Kenya's legal framework, the Competition Act, 2010, mandates that transactions meeting certain thresholds must be reported to the CAK for approval. The CAK's role is to assess whether a deal could create or strengthen a dominant market position, leading to reduced competition. While the CAK is responsible for reviewing and approving mergers to prevent anti-competitive practices, its mandate does not extend to approving the acquisition of shares in the manner described for the Portland Cement-Kalahari deal, particularly when it involves publicly listed companies where the Capital Markets Authority (CMA) plays a primary regulatory role.
For publicly listed companies, the Capital Markets Act and its regulations govern mergers and acquisitions, ensuring transparency, fair valuation, and investor protection. Additionally, sector-specific approvals may be required; for instance, the Communications Authority of Kenya (CAK – ICT regulator) approves M&A in the telecommunications sector.
The National Assembly's Trade, Industry and Cooperatives Committee, chaired by Benard Shinali (Ikolomani), has questioned the Ministry of Investments, Trade and Industry regarding the proposed sale. Industry Principal Secretary Juma Mukhwana confirmed before the committee that Kalahari Limited has secured rights to acquire the stake from Holcim. However, MPs, including Vice Chairperson Marianne Kitany (Aldai), expressed concerns about safeguarding the interests of Kenyan taxpayers and workers, particularly given the discounted share price.
Critics argue that if approved, the deal would give businessman Ebrahim Abdullah Munif effective control of 41.7% of EAPC, as he also owns Bamburi Cement, which holds a 12.5% stake in EAPC. This potential consolidation has raised alarms about undue influence over a company considered vital to Kenya's construction sector.
The primary risk highlighted by parliamentary committees is the potential undervaluation of EAPC shares, leading to a loss for Kenyan taxpayers and investors. The deal's structure could also lead to increased market concentration in the cement industry, potentially affecting competition and consumer prices. Furthermore, the lack of transparency and alleged sidelining of key government offices, such as the Attorney General's Office, raise concerns about adherence to legal procedures and public accountability.
The full implications of Kalahari Cement's ownership structure and its long-term strategic plans for EAPC remain unclear. While Kalahari has pledged not to delist EAPC, the extent of its operational influence and potential impact on EAPC's workforce and land assets are still subjects of public debate.
Further deliberations by the National Assembly's Trade, Industry and Cooperatives Committee are expected to continue. The committee's recommendations, along with the final stance of the Ministry of Mining regarding the transfer of mining rights, will be crucial in determining the fate of this acquisition. The ongoing public and parliamentary debate underscores the need for greater clarity on the deal's terms and its broader economic impact.
