Dubai-based Al-Futtaim Group has moved to acquire a third of Kenya Vehicle Manufacturers (KVM), a prominent motor dealer, by making a takeover bid of $86.3m for the Nairobi Securities Exchange-listed CMC Holdings.
KVM has an installed annual capacity of 6,600 vehicles, and the value of its investment in buildings and plant at its 40-acre site stands at four million dollars.
The Kenyan government holds the largest portion of shares in KVM at 35%, and the remainder of stock are held DT Dobie, under the acquisition of the Toyota Tshusho Corp.
In a statement by CMC’s acting managing director Mary Ngige, the motor dealer said Al Futtain Auto & Machinery would acquire 100% of CMC Holdings, resulting in its delisting.
“Under the proposed offer, each shareholder of CMC shall be offered $0.153 (13 Sh.) for each ordinary share held,” Ngige said.
“Shareholders who do not wish to accept the offer and whose shares are not acquired will under section 210 of the Companies Act remain minority shareholders in an unlisted company, thereby limiting the liquidity of the trading of their shares.”
Al Futtaim Group noted that it has no intention at present to dispose of shares after the acquisition, and will continue to operate CMC and its subsidiaries, which include Cooper Motor Corporation in Uganda and Hughes Motors and Hughes Agricultural in Tanzania.
“We are continuing our expansion drive across Africa and we hope that CMC will be the jewel in the crown of our inroads into this great continent,” said Marwan Shehadeh, group director for corporate development at Al-Futtaim Group.
“We respect the heritage of CNC Holding and the employees behind its success over its 65-year-old history in fostering economic development in Kenya.”
CMC has historically won large government contracts to supply state vehicle fleets, but the company has not traded publicly since September 2011, when an acrimonious shareholder row led to the Capital Markets Authority stepping in and freezing its stock.
A family-run conglomerate established in the 1930s Al Futtaim has over 100 companies across 20 markets, and has been eyeing new markets and opportunities amid a $1bn investment drive into, including, what it describes as “the booming African economy”.
Egyptian investment bank EFG Hermes advised Al Futtaim Group on the transaction.