Mauritius-based Crown Beverages to acquire Pepsi Bottler in Kenya

KENYA – The Competition Authority of Kenya (CAK) has granted Crown Beverages Limited, a Mauritius-based company, unconditional approval for the acquisition of the entire issued share capital of Kenya Bottling Company Limited.  

The announcement came through a Gazette Notice on Friday, with the CAK asserting that the approval was based on the conclusion that the transaction would not adversely affect competition in the non-alcoholic ready-to-drink beverages sector.

Crown Beverages is incorporated in Mauritius and will look to enter the Kenyan non-alcoholic beverages sector for the first time. 

On the other hand, Kenya Bottling Company is a locally incorporated entity operating a bottling plant in Nairobi as an independent bottler for PepsiCo products within Kenya. 

Mergers exceeding a combined turnover or assets of Kes1 billion (US$6.3M) are required to obtain approval from the CAK before proceeding with planned transactions. 

“The transaction qualifies as a merger within the meaning of Section two and 41 of the Competition Act No. 12 of 2010 which stipulates that a merger, or takeover, may occur when an undertaking directly or indirectly acquires control over another business within Kenya,” stated the CAK. 

The non-alcoholic beverages sector in Kenya is diverse, with a mix of multinational corporations and local entities. Coca-Cola dominates the carbonated drinks segment with a 93.9 percent market share, followed by Highlands (3.6 percent) and Pepsi (1.5 percent).

 The CAK underscored the significance of post-merger market share as a criterion for assessing the impact on competition, noting that, “With regard to the proposed merger, the post-merger market share in the market for non-alcoholic ready-to-drink beverages will not change since the acquirer has no market presence in Kenya.” 

Public interest factors were also considered, including the impact on employment, competitiveness of SMEs, impact on specific industries, and the ability to compete internationally

The CAK reassured that the transaction would not raise negative public interest concerns, stating, “As per the parties’ submissions, this transaction will not elicit negative public interest concerns. Specifically, there will be no employment loss and all the current 27 employees of the target will be retained.” 

During the past year, Kenyan beverage sector has attracted increased interest from Mauritius investors. In December, African Originals, the makers of popular Kenyan Original (KO) brand of ciders ceded a 28.3 percent equity stake to Mauritius-based Phoenix Beverages Group (PBG). 

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