Aliko Dangote secured a 24.7 per cent shareholding in Kenya Pipeline Company (KPC) for KSh42.5 billion after state-backed pension schemes rejected his KSh9.50-per-share offer.

The pension funds had initially asked KSh10 per share and later lowered the price to KSh9.50, while KPC shares were trading at KSh9.02 when the deal was finalised; the cash component was settled at KSh9.04 per share, a modest premium to the market price.

A dividend of KSh0.32 per share was factored into the economics, raising the effective value of the transaction to KSh9.36 per share; Dangote waived the dividend, delivering roughly KSh1.4 billion to the eight pension schemes that sold their holdings.

Kenne Belgrad, managing director of Rock Investment Bank, said the pension schemes earned an annualised return of about eight per cent before transaction costs and that even after costs of up to one per cent the return remained close to prevailing Treasury-bill rates.

“We began initial discussions with Dangote with an asking price of KSh10 and then brought it down to KSh9.50. Even after four rounds of negotiations, he (Dangote) did not accept that price,” Mr Belgrad told Business Daily.

“At KSh9.36, you have a four per cent return for the holding period, translating to an annualised return of eight per cent, which is above inflation. Even after adjusting for a maximum one per cent transaction costs, you still get a return close to the prevailing T-bill rates,” he added.

The combined pension-fund stake fell from 38.35 per cent to below 15 per cent, with the National Social Security Fund’s holding dropping from 22 per cent to six per cent and the Public Service Superannuation Fund also reduced to six per cent; smaller schemes such as Lapfund, Laptrust, Kenya Power Pension Scheme and Kenya Ports Authority Pension Scheme exited completely.

The Kenyan government retained a 35 per cent stake and Uganda’s Uganda National Oil Corporation held 20.15 per cent, leaving Dangote as the second-largest shareholder and entitled to nominate a director under KPC’s articles of association.

For the financial year ended June 2026, KPC reported revenue of KSh42.98 billion, net profit of KSh11.58 billion and operating cash flow of KSh17.39 billion, and proposed a dividend of KSh0.32 per share payable to investors on the register by November 30.

KPC shares closed at KSh10.55 on Friday, October 23, above both the cash price and the effective value of the transaction.

Dangote has outlined plans to invest about $1.5 billion (approximately KSh195 billion) to expand KPC’s roughly 1,300-kilometre pipeline network, complementing his planned 700,000-barrel-a-day Lamu refinery estimated at about KSh2.1 trillion.

The deal marks a shift in ownership of a key regional fuel infrastructure, bringing a major private-sector investor into KPC while pension funds redeploy cash from the sale.