NAIROBI, Kenya, Dec 5 – The National Assembly’s Departmental Committee on Trade, Industry & Cooperatives has directed the Competition Authority of Kenya (CAK) to investigate the proposed sale of a 29.25 per cent stake in East African Portland Cement (EAPC) from Holcim Group subsidiaries to Kalahari Cement Ltd.
The directive follows concerns that the shares may have been undervalued, potentially undermining the interests of key shareholders including the National Treasury and the National Social Security Fund (NSSF).
In its report, the committee said CAK failed to conduct a merger review as required under the Competition Act, including assessing whether the transaction would affect competition in cement production, distribution or pricing, or whether it could harm employment, SMEs or the public interest.
The MPs have given CAK 60 days to assess market concentration levels, the potential for dominance or coordinated behaviour, pricing trends and safeguards for employment and consumers.
“Kalahari Cement, through its combined interests in Bamburi Cement, could command a substantial share of Kenya’s cement production and distribution capacity,” the committee noted, warning of possible horizontal coordination and collective dominance.
The committee also raised concern that CAK has not determined the current concentration of the cement sector or the risks posed by the deal.
Separately, the committee issued a 60-day ultimatum to the EAPC board to review its memorandum and articles of association to align them with the constitution and best corporate governance standards.
The board has also been encouraged to consider buying back the shares proposed for sale by Associated International Cement Limited (AIC) and Cementia Holdings AG to stabilise ownership and protect shareholder value.
Kalahari Cement has been directed to provide a written commitment to shareholders, partners and staff assuring job security and outlining how it will support EAPC’s operations.
