• TSL’s Retreat from Nampak Zimbabwe: A Deal Undone by Shareholder Doubts
• TSL Limited abandoned its US$25 million bid for a 51.43% stake in Nampak Zimbabwe due to doubts about shareholder approval, despite meeting due diligence and regulatory requirements
• Major shareholders like Closefin (28%), Ramsway (25%), and Old Mutual (15%) likely prioritized stability, wary of risks in Zimbabwe’s volatile economy
• Concerns over Nampak’s profitability, integration challenges, and Zimbabwe’s economic instability (currency volatility, inflation) undermined the deal’s value

Harare – TSL Limited, a Zimbabwean conglomerate with interests in logistics, agrochemicals, and packaging, has terminated its US$25 million bid for a 51.43% stake in Nampak Zimbabwe, the country’s leading packaging manufacturer. The decision, announced after a Share Sale Agreement (SSA) on March 25, 2025, stems from TSL’s board doubting shareholder approval, despite clearing due diligence and regulatory hurdles, including approval from the Competition and Tariff Commission of Zimbabwe.

TSL, known for Tobacco Sales Floors, Bak Storage, Agricura, and Propak, aimed to strengthen its portfolio by acquiring Nampak Zimbabwe, a key player producing PET bottles, crates, and containers for clients like Delta (a 22% stakeholder).

The US$25 million deal, funded through internal resources and the sale of three underperforming properties (5% of TSL’s portfolio), was meant to capitalize on Zimbabwe’s growing demand for packaging in the beverage, food, and consumer goods sectors.

Nampak Southern Africa Holdings Limited (Nampak SAHL), the seller, saw the deal as part of its portfolio restructuring. However, TSL’s board abruptly ended the SSA, citing insufficient shareholder support, suggesting deeper concerns about the deal’s viability.

TSL’s decision reflects scepticism from major shareholders Closefin (28%), Ramsway (25%), Old Mutual (15%), and Pellston (7%), who likely prioritised financial stability over expansion. Closefin, led by chairperson Antony Mandiwanza and former CEO Washington Matsaira, may have viewed the deal as risky given Zimbabwe’s economic challenges, including currency volatility, inflation, and liquidity constraints.

The plan to fund the acquisition partly through property sales might have raised concerns about diverting capital, especially if sold at a discount in a weak real estate market.

In 2019, South Africa’s Vodacom Group pursued a majority stake in Telkom Kenya for approximately KES 6.5 billion (about $63 million USD), aiming to strengthen its East African presence and enhance its mobile money services. The deal progressed through comprehensive due diligence, including financial and operational audits, and secured approval from Kenya’s Communications Authority.

However, Vodacom’s shareholders raised concerns about overvaluation, integration challenges with Telkom’s underperforming network, and limited synergies in Kenya’s highly competitive telecom market, compounded by regional economic volatility. Fearing insufficient returns and potential financial strain, Vodacom’s board terminated the transaction in September 2019 without proceeding to a shareholder vote.

In 2017, South Africa’s Absa Group sought to fully consolidate its operations by delisting Barclays Africa Group (BAG) from the Johannesburg Stock Exchange in a $3.3 billion deal, following its earlier acquisition of Barclays’ African assets. The transaction built on prior due diligence and received approvals from the South African Reserve Bank and other regulators. However, BAG’s minority shareholders, including influential institutional investors, opposed the terms, arguing the offer undervalued BAG’s assets and exposed Absa to risks from currency volatility and regulatory complexities across African markets.

This shareholder resistance sparked a contentious dispute, leading Absa’s board to abandon the full delisting plan in 2018 to avoid a costly proxy fight and maintain investor confidence. Like TSL’s retreat, this case illustrates how shareholder prioritisation of financial stability over expansion can halt a deal post-regulatory approval in Africa’s challenging economic landscape.

The packaging sector, while promising, is capital-intensive and vulnerable to rising raw material costs and fluctuating consumer demand. Integrating Nampak’s operations could strain TSL’s resources or dilute focus from its core businesses which are logistics, agrochemicals, and existing packaging.

Nampak Zimbabwe, despite its market leadership, faces challenges like power shortages, foreign exchange issues, and regulatory unpredictability, casting doubt on its profitability and long-term value. Delta’s 22% stake added complexity, requiring TSL to navigate a powerful minority shareholder.

By terminating the deal without holding an Extraordinary General Meeting, TSL avoided a potential shareholder dispute, hinting at internal governance tensions or lack of consensus. The board’s focus on “sustainable, long-term value” suggests shareholders favoured safer investments with quicker returns over a deal with uncertain outcomes in Zimbabwe’s volatile economy.

At US$25 million, the deal was significant for TSL in a capital-constrained market. Shareholders likely questioned Nampak’s valuation, fearing thin margins or limited growth potential. Integration risks, including aligning operations and managing costs, could erode profitability. Zimbabwe’s economic fragility marked by unpredictable inflation, unpredictable currency policies, and supply chain disruptions, further heightened concerns.

Rising input costs (e.g., PET resin) or reduced demand from clients like Delta could squeeze Nampak’s margins, making the acquisition less appealing. Shareholders may have preferred redirecting funds to expand TSL’s existing businesses or pursue less risky opportunities.

Therefore, TSL’s retreat prioritises short-term stability but may limit its growth in the packaging sector. The board plans to explore lower-risk, higher-return opportunities but must rebuild shareholder confidence after this setback. For Nampak SAHL, the termination disrupts its restructuring efforts. Finding another buyer in Zimbabwe’s challenging investment climate will be tough, and TSL’s withdrawal may raise doubts about Nampak’s valuation or strategic fit.

The collapse of the TSL-Nampak deal highlights the challenges of deal-making in in the country where economic instability and shareholder scepticism set a high bar for corporate transactions. TSL’s diverse shareholder base, prioritising clear profitability and risk mitigation, derailed the US$25 million bid. For Nampak, the search for a new buyer continues, but the episode serves as a reminder that even well-structured deals can falter without shareholder buy-in. In Zimbabwe’s volatile market, trust and alignment remain the cornerstones of any corporate courtship.

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