Metal Cans secures approval for Nampak Kenya acquisition

KENYA – The Competition Authority of Kenya has approved Metal Cans & Closures’ acquisition of assets from Nampak Kenya, a subsidiary of South Africa-based Nampak.

This transaction will see Metal Cans take over Nampak Kenya’s plant, machinery, properties, and inventory, allowing the company to expand into new product lines, including feed cans, crown caps, and shoe polish containers.

The regulatory body determined the acquisition would not harm competition within Kenya’s metal packaging sector. Additionally, both companies have assured that the transaction is limited to asset transfer and will not impact employment levels.

This approval comes shortly after Nampak completed the sale of its Nigerian subsidiary, Bevcan Nigeria, to Singapore-based Alucan Investment for US$68.5 million (R1.25 billion).

The sale is part of Nampak’s broader strategy to streamline operations and reduce its financial debt.

Nampak originally acquired Bevcan Nigeria in 2014 for US$180.6 million, meaning the company has incurred a substantial loss on the sale.

The decision to divest was influenced by challenging economic conditions in Nigeria, including the removal of fuel subsidies and the devaluation of the naira, both of which negatively impacted Nampak’s financial performance in the region.

Proceeds from the sale will be used to reduce the company’s debt, improving its financial stability.

The first tranche of US$58.2 million is expected to be received by January 31, with an additional US$10 million due by February 7.

This move is expected to enhance Nampak’s risk profile and provide greater financial flexibility for future investments.

For the fiscal year ending September 30, 2023, Nampak’s Nigerian assets reported an attributable loss of R2 billion (US$107.18 million), including a goodwill impairment of R1.55 billion (US$83.06 million).

By exiting the Nigerian market, Nampak aims to focus on its core operations, particularly in South Africa, to strengthen its market position and drive shareholder value.

Investors have responded positively to Nampak’s strategic realignment. Following the announcement of the Bevcan Nigeria sale, Nampak’s shares surged by 18%, reflecting renewed confidence in the company’s financial restructuring and long-term growth prospects.

With the completion of these transactions, Nampak is positioning itself for a more stable and sustainable future, focusing on profitability in key African markets while reducing exposure to high-risk operations.

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