Carbacid Investments #ticker:CARB and its majority shareholder Baloobhai Patel have made a joint bid to acquire 100 percent of BOC Kenya #ticker:BOC for Sh1.2 billion.
The proposed transaction will result in the largest combined industrial gases business, bringing together Carbacid’s carbon dioxide operation and BOC’s oxygen and other gas products.
“The co-offerors have chosen to make the offer as they believe that the combination of BOC’s product portfolio and services with Carbacid’s existing business is an excellent match that will position the enlarged group to become the East and Central African region’s supplier of choice for industrial, medical and special gases and related equipment services,” Carbacid said in a notice.
The parties have offered to buy BOC shares at Sh63 apiece. Mr Patel is the single largest shareholder in Carbacid with a 40.38 per cent stake.
He also owns a 99 per cent equity in Aksaya Investments LLP, the partnership that is working with Carbacid to buy out BOC.
In 2005, BOC had attempted to acquire a majority stake in Carbacid as a means of entering the carbon dioxide market but the Capital Markets Authority (CMA) blocked the transaction, citing breach of terms by the proposed acquirer.
BOC’s sales and earnings have dropped substantially in subsequent years, owing to increased competition that has made it difficult for the company to raise prices despite rising costs.
Carbacid is the major producer of carbon dioxide which is used to make fizzy beverages like soft drinks, among other applications. The company has also faced increased competition in recent years from alcohol manufacturers who harvest the gas as a by-product of their production process.
