Carbacid’s Proposed Acquisition of BOC Kenya will Improve Industrial Development in Kenya

A takeover bid was recently launched involving Carbacid Investments Limited and BOC, as the former is set to buy the latter. This will ultimately boost industrial development in the country, and local investors of the two firms will have a reason to smile.

Carbacid’s chairman Amb. Denis Awori gave an update on the takeover on Monday. He emphasized that the transaction will increase local control of BOC, which is currently being controlled by multinational investors.

The major stakeholder of BOC Kenya is BOC Holdings, a UK-based company which owns 65.38% stake in the company. BOC Holdings has agreed to sell all its stake to Carbacid irrevocably once it is served with the offer document.

Carbacid is fully owned by Kenyans, and it will benefit from a more diversified and dynamic board as a result of the acquisition. The firm will also access capital investments to promote growth and development in the manufacturing sector.

Awori also noted that the acquisition will play a significant role in Kenya’s commitment to expand the manufacturing sector and achieve industrial development.

CIL shareholders have already approved the purchase of BOC Kenya in an AGM meeting last week. It is expected that the transaction will happen soon after getting a nod from key people in the organization. What is now remaining is fundamentally a legal and regulatory process to ensure compliance with industry regulators.

The purchase will be unconditional, says Awori. This basically means that BOC shareholders will choose to sell or retain their shares with the company. This is contrary with what happened in the past when Kenol Kobil exited NSE following acquisition by a foreign firm. At that time, all publicly owned shares were bought back.

The takeover is part of Carbacid’s diversification strategy, which is currently operating only one line of business. CIL produces food-grade carbon dioxide, while BOC Kenya produces oxygen. Thus, the acquisition will enable Carbacid to diversify to a new business and increase its revenue.

Awori has applauded the decision, postulating that it will increase the firm’s portfolio into the medical, industrial, and special gases. The acquisition will supposedly enhance rather than eroding the operating capability of BOC.

“Indeed, we intend to enhance its market capacity through the integration of modern manufacturing units under a revitalization strategy geared at positioning BOC as the leading producer and supplier of industrial, medical and speciality gases in the local and regional markets,” Awaori said.

The takeover will hopefully have a positive impact on the firm’s financial outlook. This is good news to investors who are looking for an opportunity to invest in the manufacturing sector in Kenya. With government commitment to promote industrial development in the country, investment decisions in the manufacturing sector such as this one will definitely be supported. Accordingly, Carbacid shares will be a good buy in the Nairobi Stock Exchange going forward.

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