The United Arab Emirates-based firm Al-Futtaim Group said Monday it has so far secured over 91 percent stake of East Africa's key layer in automotive industry.
Al-Futtaim group has received acceptances from shareholders of CMC Holdings Limited to acquire over 91 percent of CMC's issued share capital, paving the way for a swift conclusion of the 90 million U.S. dollar transaction.
"We are pleased by the extremely strong support from the shareholders of CMC. The positive response from CMC's shareholders is a huge vote of confidence in the Al-Futtaim Group and in its plans for this region," said Marwan Shehadeh, the Group Director for Corporate Development at Al-Futtaim Group.
According to the final results of the offer, Al-Futtaim now holds forms of acceptances with respect to 533 million shares of the Nairobi Securities Exchange (NSE) listed motor dealer.
"We are looking forward to turning CMC around back to its glory days as the leading motor dealer in East Africa, in order to add value to its employees, its customers, the CMC franchisors and the economy of East Africa," said Shehadeh.
In September 2013, Al-Futtaim announced its intention to buy 100 percent of the share capital of CMC at 0.15 dollars per share. The acquisition will be made through its subsidiary Al-Futtaim Auto & Machinery Company (Famco).
CMC shareholders had up to Jan. 24 to sell their shares to Al- Futtaim. On successful completion of the transaction, CMC Holdings is expected to be delisted from the Nairobi Stock Exchange, making the shares illiquid for those who do not take advantage of the offer.
Initially, the firm had set a threshold of acquiring 75 percent+ 1 shares, for the deal to proceed but later waived this condition, with approval from the Capital Markets Authority.
Shareholders of CMC Holdings only had until Feb. 18 at 17: 00hours to sell their shares to the global diversified conglomerate at 0.15 dollars each.
The deal is one of the biggest foreign direct investment inflows into the Kenyan economy in recent times and is expected to highlight the appeal of Kenya to global firms seeking a foothold in the emerging African economy. It also demonstrates the potential and the long-term prospects of one of Kenya's oldest vehicle dealers.
"We are very excited by this acquisition and the growth opportunity it represents," Al-Futtaim's Automotive President Len Hunt said.
Hunt said the UAE-based company will be pursuing opportunities to provide tier one services across the entire automotive value chain in Kenya and the wider region.
"This includes sale, service and maintenance of new and used vehicles, machinery and equipment, in addition to the supply of genuine parts and accessories," he said.
The successful acquisition of the CMC group represents Al- Futtaim Group's first venture into the sub-Saharan and Eastern Africa regions, providing an ideal platform to broaden Al- Futtaim's footprint in new regions beyond its current operations in the Gulf Cooperation Council (GCC) states, the greater Middle East region and increasingly, in South-East Asia.