Nigerian billionaire Aliko Dangote has confirmed that his business group acquired a 25 per cent stake in Kenya Pipeline Company (KPC) in a transaction valued at approximately Ksh42.5 billion ($327 million).
Dangote disclosed the investment while speaking at the 13th annual Financial Times Africa Summit in London on Wednesday, October 21. However, he did not reveal the specific company within his business empire that purchased the shares.
“We bought 25 per cent of their pipeline network for the distribution of petroleum products,” he stated.
According to Bloomberg, the announcement identifies the buyer behind a major share transaction involving 4.5 billion KPC shares, which was reported by the Nairobi Securities Exchange (NSE) on Monday.
The shares changed hands at prices ranging between Ksh9.02 and Ksh9.36 apiece, with the transaction generating approximately Ksh42.46 billion.
Under Kenya's capital markets regulations, an investor who acquires 25 per cent or more of a listed company's voting shares may trigger a mandatory takeover obligation, subject to applicable rules and exemptions, requiring formal disclosure to the Capital Markets Authority (CMA).
KPC, which was previously fully owned by the Kenyan government, opened its Initial Public Offering (IPO) on January 19 and closed it on February 19 before listing on the NSE on March 9. The government offered 65 per cent of the company's shares to investors through the public offering.
President William Ruto had previously announced that private investors purchased shares from public entities but did not identify the buyers or disclose which institutions disposed of their holdings.
Among the major public investors in KPC following the IPO were the National Social Security Fund (NSSF), the Unclaimed Financial Assets Authority (UFAA) and state-backed pension schemes. However, the identities of the institutions involved in the latest share transaction have not been independently established.
The acquisition has also intensified scrutiny of the government's handling of public investments, following allegations by Kiharu Member of Parliament (MP) Ndindi Nyoro that pension funds were encouraged to purchase KPC shares before some holdings were subsequently sold to a private investor.
In a statement posted on Wednesday, Nyoro claimed that the shares were disposed of at a loss after transaction costs were considered. He further alleged that the investor and the investment bank involved had connections to the President.
“The other week, I was suspended from Parliament for stating the obvious. That the Kenya Pipeline IPO was a failure, subscription being below 3 per cent at the last day of the IPO. And that President William Ruto called the CEOs of NSSF, PSSF, Unclaimed Assets, CPF, and others to risk pensioners' savings against professional advice,” he wrote.
Nyoro's claims add to questions surrounding the participation of public pension funds in the IPO and the subsequent movement of KPC shares. The allegations, however, require verification against official transaction records and responses from the institutions concerned.
Beyond the shareholding changes, KPC is also considering plans for a petroleum trading hub estimated to cost Ksh35 billion. The proposed development would occupy 377 acres owned by its subsidiary, Kenya Petroleum Refineries Ltd.
The project comes as the region considers a proposed Ksh2.2 trillion East Africa Refinery, raising questions about how the two developments would complement one another and what role Dangote's investment could play in Kenya's petroleum infrastructure.
Dangote's confirmation marks a significant development in the ownership of one of Kenya's key energy infrastructure companies, although details of the purchasing entity and the public institutions involved in the transaction remain outstanding.
