CMA should review Carbacid-BOC Kenya deal

CMA should review Carbacid-BOC Kenya deal

Billionaire investor Baloobhai Patel. FILE PHOTO | NMG The local business acquisition artist and majority shareholder in listed medical gases manufacturer, Carbacid Investment Plc, Baloobhai Chotobhai Patel is on to a good thing.

Companies he controls have signed an irrevocable agreement with BOC Holdings Ltd, whereby they will purchase the 65 percent majority stake which the multinational owns in local oxygen manufacturer BOC Kenya.

If the deal succeeds, the local tycoon will have assumed control and dominant influence in the local market for medical oxygen and industrial gases as never witnessed in the market before.

Carbacid Plc is mostly manufacturer of industrial carbon dioxide. But the company regularly enters into partnerships with small oxygen traders to compete with BOC Kenya on contracts especially with the big hospitals.

Here is a bit of background to the latest saga in the mergers and acquisitions space in Kenya..

In a notice dated November 25, 2020- Carbacid Investments Plc- in which by Mr Patel has a dominant 40per cent stake-and a hitherto unknown entity by the name Aksaya Investment LLP- also owned by Patel – announced their intention to make a cash offer of Sh 1.2 billion to acquire 100 per cent of issued ordinary shares of BOC Kenya Ltd.

That notice was followed by another on December 9, 2020, where Carbacid Investment Plc served on BOC Kenya and offeror’s statement providing details of the terms of the offer.

According to that offer document, BOC Holdings, which is based in Munich Germany-,has accepted the offer and consequently signed an undisclosed agreement with the purchasers in which the parties have agreed on a completion date of July 31, 2021.

Enough of background. I go back to the statement I made at the beginning of the article that Mr Patel is on to a good thing.

The local tycoon has calculated that current circumstances provide the best opportunity to pounce, take out a rival, and achieve dominance in the local market for sale and manufacturing of industrial gases, medical gases and welding products.

Why do I say that the investor has decided to pounce on a good opportunity and take full advantage of current circumstances?In the first place, the local investor is dealing with a multinational that has already made a decision at the global level that to quit Africa.The deal in Kenya was announced by the multinational hardly weeks after it announced that it had also accepted an offer to sell its majority stake […]

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