ARM Cement could be subject to a takeover from Oman’s largest cement manufacturer Raysut Cement Company, which is eyeing an acquisition in the region of Ksh10.2 billion as part of the company’s expansion plans into Africa.
Raysut has already expressed its interest to the administrators of ARM Cement, a statement from the Oman cement manufacturer on December 4 said.
The proposed Ksh10.2 billion buyout is part of Raysut’s “aggressive strategy to expand in East and Central Africa” and comes in the wake of ARM Cement being placed under administration in August of this year.
Raysut said the acquisition will complement Raysut’s revised strategy to manufacture clinker in proximity to the markets it supplies to in East Africa.
ARM Cement, which has been under PriceWaterHouse Coopers(PwC) administrators has also been suspended from trading at the Nairobi Securities Exchange (NSE).
The cash strapped cement manufacturer has also been linked to a bid from Nigeria’s Aliko Dangote. Africa’s richest man described a cement manufacturer which “has operations in Tanzania, Kenya and Rwanda” during an interview with Bloomberg last month.
Although Mr. Dangote did not mention the company by name, media reports speculated that ARM Cement could be the firm being targeted by the Nigerian billionaire, as it fits the portfolio of what he described.
Raysut could thus be engaged in a bidding war with Mr. Dangote in its plans to acquire ARM Cement.
The Oman based cement producer also said that it is in the process of setting up a grinding unit in Somaliland and Mogadishu, Somalia with a Dubai-based partner and is also in advanced discussions to acquire various cement producers in Uganda and Djibouti.
The East Africa offensive does not end there, as it also plans build a one million tonne per annum cement plant in Berbera, Somalia, with the construction work set to start as early as January 2019.
Raysut is also in advanced negotiations with Kampala Cement, it said in its statement.
All this is part of a proposed five year strategy by Raysut’s Kenyan-born chief executive Joey Ghose. As per industry reports, Mr. Ghose wants to grow Raysut Cement into a 20 million tonne company by 2022.