Sarrai Group, led by billionaire Sarbjit Singh Rai, has made a significant stride in the cement industry with a colossal Ksh 18 billion deal.
The Nairobi Securities Exchange (NSE) recently announced that Sarrai Group, in collaboration with Rwimi Holdings, is set to acquire Bamburi Cement’s stake in Uganda and Rwanda operations.
The deal, estimated at $120 million (Ksh 18 billion), involves the purchase of 1,335,600 ordinary shares in Hima Cement Limited, a major player in Uganda with operations extending into Rwanda.
This move marks a strategic shift as Sarrai Group and Rwimi Holdings aim to secure a 100% stake, taking over Bamburi Cement’s substantial 70% controlling interest.
However, the deal is pending approval from the Capital Markets Authority (CMA) and other regulatory bodies. Shareholders of Bamburi Cement are also crucial stakeholders, requiring their nod for the transaction’s completion.
Upon successful acquisition, Hima Cement Limited, including its subsidiaries such as Hima Cement Rwanda Limited, will transition from being part of the Bamburi group to becoming a member of the Sarrai group.
This move implies Bamburi Cement’s withdrawal from the Ugandan and Rwandan markets, focusing its operations on the Kenyan sector.
Sarrai Group, known for its Rai Cement factory in Kisumu, expands its footprint in East Africa with this deal. The group’s diversified holdings include the contested Mumias Sugar Company (MSC), adding to its prominence in various sectors.
The Rai family has been a notable force in Kenyan business, with Sarbjit Rai and his elder brother, Jaswant Rai, both making headlines.
The familial ties have, at times, become entangled in business rivalries and legal disputes, as seen in the 2019 MSC lease bidding saga.
Under the agreement, Sarrai Group secures control over key assets, including a grinding plant in Tororo, a blending station in Namanve (both in Uganda), and ownership of a clinker and cement plant in Kasese, Uganda, along with Hima Cement in Rwanda.
This strategic acquisition positions Sarrai Group as a major player in the regional cement industry, fostering economic growth and further solidifying its influence in East Africa.