KENYA – The Competition Authority of Kenya (CAK) has approved Aaryan Investments Limited (AIL), to acquire 50% stake in animal feed joint venture by Bidco Africa and American Conglomerate Land O’Lakes.

The proposed deal involves the acquisition of an additional 50 percent shares in Bidco Land O’ Lakes by AIL, gaining full control of the business.

Aaryan, which is incorporated in Kenya as an investment holding company, currently owns 50 percent of the target’s issued share capital.

The company also controls Bidco Africa Limited which, through its subsidiaries, manufactures fast-moving consumer goods and fruit-based drinks.

“Based on the foregoing, the authority approved the proposed acquisition of 50 percent shareholding in Bidco Land O’ Lakes Limited by Aaryan Investments Limited unconditionally,” said the CAK in a notice to the public.

AIL is buying more stake in the animal feed firm barely a few months after Bidco Africa teamed up with Land O’Lakes to invest US$11.12 million in the upgrade of its factory in Nakuru city, which is located approximately 157 kilometres from the capital city Nairobi.

“Based on the foregoing, the authority approved the proposed acquisition of 50 percent shareholding in Bidco Land O’ Lakes Limited by Aaryan Investments Limited unconditionally.”

Competition Authority of Kenya

Commissioned in 2019, the plant commenced processing with a capacity of 28 tonnes per hour.

The scheduled investment will boost its capacity and in turn raise competition in the Kenyan market against existing players such as Unga Group, Pembe Feeds, Sigma Feeds, Mombasa Maize Millers, Pioneer Feeds etc.

The new plant produces four products, Pro Calf Starter, Pro Heifer Developer, Pig Starter 4-4-4 and Pro Calf Milk replacer and incorporates new technology to test every load of ingredients for quality (aiming for zero aflatoxins or other harmful elements) while ensuring the right mix of nutritional elements.

The new products supplement Bidco Feeds brands that are processed at their Thika-based feed mill which has a capacity to process 48,000 tonnes a year.

According to a study undertaken by the Kenya Market Trust, a non-profit organization working on agriculture market systems, in 2016, there were 209 registered animal feed manufacturers in Kenya and 96 suppliers of raw materials, out of which ninety-four entities engage in both commercial activities.

Distribution zones of the feed manufacturers and suppliers are concentrated in the commercial dairy and poultry regions – Central and Rift Valley.

CAK has indicated that post-acquisition, there will be no consolidation of market shares and the market structure will not be affected since the merging parties are in different lines of business.

Additionally, the target will continue facing competition from other manufacturers of animal feeds in Kenya.