KENYA – US based investment firm Texas Pacific Group (TPG) has deepened its stake in Kenya’s thriving milk sector by acquiring 33.9% stake in Kenya’s local dairy processor Maziwa Limited.
TPG has acquired Maziwa Ltd through its fully-owned subsidiary Pledge Holdco Ltd who will take part in running the business that distributes milk and milk-related products across Kenya, Uganda and Zambia.
The acquisition whose amount was not disclosed, was approved by the Competition Authority of Kenya (CAK).
“The Competition Authority of Kenya has approved the proposed subscription of 33.9 percent of the issued share capital and joint control of Maziwa Limited by Pledge Holdco Limited with other shareholders unconditionally,” said the approval signed by CAK director-general Wang’ombe Kariuki.
In its disclosures, TPG Capital said it also has interests in Kenya’s Dodla Dairy Ltd, thanks to a 2017 purchase of a Sh5 billion (US$48m) stake in India-based parent company, where it processes one million litres of fresh milk daily received from 250,000 farmers reports Business Daily.
The CAK said TPG’s entry into the Kenyan market will not give it unfair advantage over its competitors since Maziwa Ltd is a minority player with 0.9 percent market share to Brookside Dairy’s (40 percent), Sameer (14 percent), New KCC (25 percent), Githunguri (12 percent) and Pascha’s 1.7 percent.
“Post-transaction, the merged entity will have a market share of 3.9 percent. This is unlikely to raise competition concerns since its market share will be considerably low.”
“Further, it is anticipated that the merged entity will face competition from processed milk players as well as informal milk producers,” says the CAK report.
Maziwa, wholly-owned by Mauritius-based Bainne Ltd distributes milk and milk-related products under the brand name ‘Lola’. It has a significant stake in Musty Distribution Ltd, a Kenyan firm whose main business is milk distribution.
TPG Capital also has interest in Cellulant Corporation, a mobile payment firm designed after it paid Sh4.8 billion (US$46m) last year, to acquire a stake in the company with operations in 33 African countries serving banks and telcos.