Ugandan Dairy Giant Fully Acquires Kisii-Based Dairy Processor



Uganda-based milk processor Lato has purchased a 100% stake in Kenyan dairy firm Highland Creamers.

The milk processing company from Uganda known for the Lato brand has been granted permission to acquire a Kenyan milk company. This approval enables them to address challenges that have been affecting their product supply and sales in Kenya. 

According to a notice from the Comesa Competition Commission dated March 11, Maziwa, the holding company registered in Mauritius, has been authorized to purchase a 100 percent stake in Highland Creamers & Food Limited. This Kisii-based company, which launched its operations in 2015 and is responsible for the Farmily Milk brand, is now under Maziwa's ownership.

"The CID (Committee Responsible for Initial Determinations) determined that the merger is not likely to substantially prevent or lessen competition in the Common Market or a substantial part of it, nor will it be contrary to the public interest," stated the competition.

In Uganda, Maziwa operates through its subsidiary Pearl Dairy Farms Limited, handling the collection, processing, and sale of milk and milk products. 




The company has relied on the Kisii firm to distribute its products in Western Kenya. The competition regulator observed that Pearl Dairy Farms is not a major purchaser and emphasized the presence of other competitors in the market, ensuring ongoing competition.

The Commission also took into account inputs from the national competition authorities of Egypt, Kenya, and Malawi, all of which did not express any concerns regarding the transaction.

"Further, it was evident from the parties' submission and from the submissions by the Competition Authority of Kenya that the market was fragmented with numerous competitors who would continue to exert competitive pressure on the merged entity," observed the commission. 

Approximately a year following Kenya's decision to allow the company to invest in domestic dairy facilities, the deal was finalized. Pearl entered into an agreement with Kenya Development Corporation, a state-owned financial institution, to collaborate on investing in local dairy projects.

In April of last year, Pearl obtained a $35 million (Sh5.36 billion) loan from the International Finance Corporation. As part of the agreement, Pearl committed to investing $21 million (Sh3.22 billion) in enhancing and modernizing its powdered milk production in Uganda and acquiring a packaging business in Kenya.

"The CID therefore approves this transaction."



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