Aliko Dangote now owns a quarter of the pipes that carry Kenya's fuel. Speaking at the Financial Times Africa Summit in London on Wednesday, 21 October, the Nigerian industrialist confirmed that his group had bought 25% of Kenya Pipeline Company (KPC). "We bought 25% of their pipeline network for the distribution of petroleum products," he said, according to Kenyans.co.ke and Nairametrics, both citing Bloomberg.
His remarks identified the buyer behind a block trade the Nairobi Securities Exchange reported on Monday: about 4.5 billion KPC shares, sold at prices between KSh9.02 and KSh9.36, for roughly KSh42.46 billion, or $327 million. Dangote did not say which company in his group made the purchase.
What he bought
KPC moves petroleum products from the port of Mombasa to inland depots and on to neighbouring East African markets. Nairametrics, citing the company's website, puts the network at about 1,342 kilometres with an annual handling capacity of 14 billion litres. The government owned all of it until this year, when it sold 65% in an IPO that opened on 19 January and listed the company on the NSE on 9 March. Nairametrics puts KPC's market value at about KSh163.9 billion.
Under Kenya's capital markets rules, buying 25% or more of a listed company's voting shares triggers a mandatory takeover procedure and a formal notice to the Capital Markets Authority, Kenyans.co.ke reports.
Pipes to go with a refinery
The stake sits beside a much bigger Dangote project in the country. Ground was broken on 30 September on his planned refinery in the Lamu archipelago, which Nairametrics says is expected to cost $16 billion to $17 billion and to be completed around 2030. The Kenyan government has said it plans to take an equity stake in that refinery through its National Infrastructure Fund.
