22 March 2019

Simba Cement Company
Limited has been given the green light to acquire the entire business and
assets of Cemtech Company Limited.

Competition Authority of Kenya which approved the
acquisition says the move which is unlikely to disrupt the market is also
backed by Cemtech’s decade-long dormancy and consistent search for a strategic
partner to finance construction of a cement plant.

Simba Cement is operating under National Cement
brand name and holds 8% of the market share, which is the lowest.

Bamburi Cement Limited holds the largest share of
the cement market at 33%, Mombasa Cement Limited at 16%, East African Portland
Cement Company at 15%, Savannah Cement 15% and Athi River Mining Africa Limited

Simba Cement will now have access to Cemtech
Company Limited Limestone and clay deposits in West Pokot , India, including
all the licenses expanding its cement production capacity as limestone and clay
are key inputs in clinker production.

With merger agreement approval
sealed Simba Cement will now acquire 100% business and assets of the Cemtech
Limited. These include land, business intellectual property, business records,
equipment, goodwill, licenses, stock and third party rights.

Approving the merger, CAK says “The proposed
transaction qualifies as a merger within the meaning of Section 2 and 41 of the
Competition Act No.12 of 2010. Cemtech had no turnover for the preceding year
and, therefore, for purposes of evaluating the proposed transaction, its
assets, in lieu of turnover, were considered.”

The authority and stakeholders welcome the merger,
which they believe will resuscitate the dormant firm, create jobs and raise the
economic profile of citizens of West Pokot County.

Once the deal is operational,
Cemtech envisions distributing its products across the country just as Simba
Cement does with its cement product.

Kenya National Bureau of Statistics latest data
shows that cement production decreased by 8.2% from 6.7 Million tonnes in 2016
to 6.2 Million tonnes in 2017.

Similarly, cement consumption and stocks decreased from 6.3 Million tonnes in 2016 to 5.8 Million tonnes in 2017 owing to reduced demand in the construction sector.

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