Nigerian industrialist Aliko Dangote has acquired a 24.76% stake in Kenya Pipeline Company (KPC) for approximately US$335 million, expanding his interests in East Africa's petroleum transportation and distribution infrastructure. Dangote disclosed the acquisition on Wednesday at the Financial Times Africa Summit in London, confirming the buyer behind a block trade involving approximately 4.5 billion shares in the Nairobi Securities Exchange-listed company.
The transaction was valued at KSh42.5 billion, according to reports on the share transfer, which took place on October 19. The shares were sold by state-linked institutions that had invested in KPC during its initial public offering (IPO) earlier this year. The specific legal entity within Dangote's business group that acquired the stake has not been disclosed.
KPC listed on the Nairobi Securities Exchange on March 9, following an IPO through which the Kenyan government sold a 65% stake in the company, retaining 35%. The National Social Security Fund, the Public Servants Pension Scheme, the County Workers Pension Fund and the Unclaimed Financial Assets Authority were among the public institutions that acquired shares during the offering. Uganda National Oil Company separately acquired a 20.15% stake.
Dangote's acquisition makes him one of KPC's largest shareholders, behind the Kenyan government. The company's approximately 1,342-kilometre pipeline network transports petroleum products from the port of Mombasa to inland Kenyan markets and neighbouring countries, including Uganda, Rwanda, South Sudan and the Democratic Republic of Congo.
The investment comes as Dangote advances plans for a proposed US$16 billion refinery in Lamu, Kenya, with a planned processing capacity of 700,000 barrels per day. He has also announced plans to invest US$1.5 billion in expanding KPC's pipeline network, positioning the acquisition within a broader strategy to develop refining, storage and distribution infrastructure across African markets.
The transaction has also drawn scrutiny over the sale of substantial holdings by public institutions less than eight months after KPC's IPO. Questions have emerged concerning the identities of the individual sellers, the terms of the disposal and the returns received by the institutions involved.
While Kenyan President William Ruto has described the sale of the stake to private investors as a sign of investor confidence, in Kenya, the transaction places renewed focus on disclosure and accountability in the transfer of shares in strategic national infrastructure.
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