Uganda’s milk processing firm behind the Lato brand has received approval to acquire a Kenyan milk company, giving it room to overcome hurdles that have been disrupting the supply and sell of its products in Kenya.
The Comesa Competition Commission in a notice dated March 11, says it has approved the transaction, allowing Maziwa, the non-operating holding company incorporated in Mauritius, to acquire 100 percent stake in Highland Creamers & Food Limited— a Kisii-based firm that started operations in 2015 and is behind the Farmily Milk brand.
“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,” said the Commission.
In Uganda, Maziwa collects, processes and sells milk and milk products under its subsidiary Pearl Dairy Farms Limited. It has been depending on the Kisii firm to help it sell its products in Western Kenya.
The competition watchdog noted that Pearl is not a significant buyer and that there were other players in the market which will ensure there is continued competition.
The Commission said it also considered submissions from the national competition authorities of Egypt, Kenya and Malawi, all which did not raise any concerns in relation to 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,” said the Commission.
The deal comes about a year after Kenya opened doors for the company to invest in local dairy factories. Pearl signed a deal with the state-owned financier Kenya Development Corporation to invest jointly in local dairy ventures.
