The Competition Authority of Kenya (CAK) has cleared Crown Beverages (Mauritius) Ltd to acquire the entire issued share capital of Kenya Bottling Company Limited.
SBC Kenya Ltd (SBC Kenya), which is fully owned by Kenya Bottling Company Limited, operates a bottling plant in Nairobi as an independent bottler for PepsiCo products within Kenya.
In a Gazette Notice No.91, CAK said that “Pursuant to the provisions of section 46 (6) of the Competition Act, 2010, it is notified for general information that in exercise of the powers conferred upon the Competition Authority by section 46 (6) (a) (ii) of the Competition Act, the Competition Authority has authorised the proposed transaction as set out herein”.
In a further explanatory note, CAK further said that the “approval has been granted based on the finding that the transaction is unlikely to negatively impact competition in the market for non-alcoholic ready-to-drink (NARTD) beverages, nor elicit negative public interest concerns, the two key considerations during merger analysis”.
A search at Mauritius’ Corporate and Business Registration Department shows that Crown Beverages (Mauritius) Ltd was incorporated on the 15th of September 2023. Its registered directors are Kayoboke Christopher, Kayoboke Julius Nkurunziza (son of Chris Kayoboke), Kigozi Margaret Jean Blick and Nzeyi Amos.
Other directors are Coowar Bibi Shaheen, Rambocus Reshan Kirti and Bundhoo Muhammad Cader Imteaz.
Reshan Rambocus is the Chief Executive Officer and Founder of Safyr Utilis a financial services group based in Mauritius, that combines wealth structuring and fund administration with an investment banking reach. Coowar Bibi Shaheen and Bundhoo Muhammad Cader Imteaz are lawyers with the firm. We believe Safyr Utilis is not a co-investor but rather an offshoring firm retained to structure the deal as an offshore investment.
Amos Nzeyi and Chris Kayoboke, each own 40.885% of Crown Beverages Limited, Uganda’s PepsiCo franchise bottler, while Kigozi Margaret Jean Blick (famously known in Uganda as Dr. Maggie Kigozi) owns 18.23%.
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Crown Beverages (Uganda) is the franchise bottler of global food, snack, and beverage giant, PepsiCo, Inc in Uganda. The company bottles Pepsi, Mountain Dew, Mirinda Fruity, Mirinda Orange, Mirinda Pineapple, Mirinda Green Apple, Evervess Tonic, Sting Energy Drink as well as Nivana and Aquafina water.
It is not yet clear how much the Ugandan billionaires are paying for the Kenyan bottler, but it is certainly anywhere above KShs 1 billion (UGX24 billion).
Kenya’s Competition Act No. 12 of 2010 stipulates that merging parties whose combined turnover or assets, whichever is higher, is over KShs 1 Billion are required to seek approval from the Authority before implementing the proposed transaction.
“The transaction between Crown Beverages and SBC Kenya met this threshold for mandatory notification,” CAK said.
The move by the Ugandan billionaires is quite a ballsy one, given that according to CAK, Kenya Bottling Company owns only 1.5% market share with Coca-Cola the leading player holding a gigantic 93.9% market share, followed by Highlands (3.6%).
There will be a lot of learning from the Ugandan case study in which Crown Beverages has reversed an onslaught by Coca-Cola and reclaimed its lost market share.