KENYA – The Capital Markets Authority (CMA) has granted B Commodities ME (FZE), an affiliate of Sri-Lanka-based Browns Investment Plc, an exemption from the requirement to make a takeover offer for the remaining shares of Limuru Tea.
This decision aligns with Regulation 5 of the Capital Markets Takeover Regulations 2002. Regulation 5 allows the CMA to grant exemptions if the acquisition of a listed company is in distress or in any other circumstances that serve the public interest, such as a management buyout involving a majority of the employees.
According to CMA regulations, an entity that acquires more than 50 percent of another company’s stake is typically required to make a takeover offer for the remaining shares or apply for an exemption from this obligation.
B Commodities, through its ownership in Browns, indirectly acquired 51.99 percent of Limuru Tea’s issued share capital when it took over the tea estates and factories owned by Lipton Teas and Infusions in Kenya, Rwanda, and Tanzania.
Following this acquisition, B Commodities will not be making a takeover offer for Limuru Tea, which will continue to be listed on the Nairobi Securities Exchange.
“B Commodities hereby announces that the Capital Markets Authority has granted an exemption from the requirements to make a takeover offer for Limuru Tea on the grounds set out in Regulation 5 of the Takeover Regulations,” the Authority stated.
Earlier last month, B Commodities announced plans to acquire a significant share in Limuru Tea Company, aiming for indirect control and beneficial ownership. This was after completing a share purchase agreement with Ekaterra Company, the largest shareholder of Limuru Tea.
On May 6, 2024, Ekaterra and B Commodities entered into an agreement for the sale of the share capital of various Ekaterra subsidiaries and affiliates in East Africa, including 95.56 percent of the total issued capital of Lipton Tea.
The acquisition of Limuru Tea was projected to increase Browns’ processing capacity to 87 million kilograms of tea, positioning it as one of the world’s largest tea companies.
Additionally, 15 percent of the assets acquired by Browns will be reserved for the communities where the estates are located through a Community Welfare Trust.
Lipton tests climate change mitigation practices
In a related development, Lipton Teas and Infusions, in partnership with Cranfield University and supported by the UK’s Biotechnology and Biological Sciences Research Council (BBSRC) and UK Tea & Infusions Association (UKTIA), has begun field trials to test climate change mitigation and resilience practices.
These practices aim to improve tea production standards through the use of drone imagery and analysis for better crop management, precision farming, and high-throughput canopy phenotyping for developing climate-resilient tea plant varieties.
These trials will also enable tea producers to accurately calculate their carbon footprint, leading to better quality tea, less wastage, and a lower environmental impact.
The scientific understanding gained from these trials is expected to significantly enhance tea production standards and sustainability across the industry.
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