Nigerian billionaire Aliko Dangote has acquired a 24.7% stake in Kenya Pipeline Company (KPC) in a deal valued at approximately $327 million (KSh42.5 billion).
Dangote, founder and chief executive of Dangote Industries, announced the acquisition at the Financial Times Africa Summit in London on Wednesday, October 21. He did not disclose which company within his business group made the purchase.
“We bought about 25 percent of their pipeline network for the distribution of petroleum products,” Dangote said.
Number of Shares
The deal involves about 4.5 billion KPC shares, equivalent to roughly 24.76% of the company, which changed hands in a block transaction reported to the Nairobi Securities Exchange (NSE) earlier this week. The shares were previously held by public institutions.
The acquisition comes as Dangote expands his energy investments in Kenya.
In September, he broke ground on a proposed 700,000-barrel-per-day refinery in Lamu, estimated to cost about $16 billion (Ksh.2.2 trillion). The facility is intended to supply Kenya and other regional markets.
KPC operates critical infrastructure for transporting petroleum products from the coast to inland markets, making the stake strategically significant for a businessman seeking a larger role in the region’s fuel supply chain.
The transaction also puts renewed attention on the sale of KPC shares by public institutions following the company’s initial public offering earlier this year.
Where CMA Steps In
The shares equal 24.76% of KPC stock, keeping the deal just below the 25% threshold that would have required approval from the Capital Markets Authority (CMA).
KPC’s new top shareholders include the government of Uganda and Kenya’s National Social Security Fund.
The government priced the company’s initial public offering at KSh9 per share. The offer ran from January 19 to February 24, and shares began trading on March 9.