The Competition Authority of Kenya (CAK) has approved Bidcoro Africa Group‘s (Bidco) joint venture to fully acquire Suntory Beverage & Food Kenya Limited, the company which manufactures Ribena and Lucozade brands.
In a statement on Tuesday August 20, the Competition Authority of Kenya said it had approved the proposed acquisition of the entire issued share capital of Suntory Beverage & Food Kenya Limited by Bidco Africa Limited unconditionally.
“The proposed transaction involves the acquisition of the entire issued share capital of Suntory Kenya by Bidco,” reads the statement in part.
“The parties indicated that the rationale of the transaction is addressing the target’s underperformance by leveraging on the acquirer’s production and commercialization expertise.”
CAK stated that the approval was granted after determining that the transaction is unlikely to harm competition in the non-alcoholic ready-to-drink (NARTD) beverage market or raise public interest concerns.
Bidco Acquires Suntory
Therefore, Suntory will now be a wholly owned subsidiary of Bidco and will transfer all its contract manufacturing business.
“The proposed transaction is unlikely to lead to a substantial lessening or prevention of competition in the market for NARTD beverages in Kenya,” CAK said.
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According to the parties’ submissions, there will be no job losses, as Suntory Kenya employees will be retained on comparable terms and conditions prior to the transaction.
“During merger analysis, the Authority also considers the impact that a proposed transaction will have on public interest. As per the parties’ submissions, this transaction will not elicit negative public interest concerns,” the statement further reads.
CAK stated that sections 2 and 41 of the Competition Act CAPS 504 allow for a merger or takeover when one business gains control over another in Kenya.
This can occur through methods such as purchasing or leasing shares, exchanging shares, or vertical integration.
Additionally, merging parties with a combined turnover or assets exceeding Ksh 1 billion must obtain approval from the Authority before proceeding with a proposed transaction.
According to CAK, the deal between Suntory Kenya and Bidco Africa met this threshold for mandatory notification and full analysis as outlined in the Competition (General) Rules, 2019.
About Bidco and Suntory
Bidco is incorporated in Kenya and is involved in the manufacturing, processing, marketing and sale of concentrates (cordials, syrups, and squashes), soft drinks, and ice lollies. Some of Bidco’s brands include Suntop, Sunquick, and Suncola.
Meanwhile, Suntory Beverage & Food Kenya Limited (Suntory Kenya) is wholly owned by Suntory Beverage & Food Asia Pte. Ltd.
It manufactures, processes, distributes, and sells soft drinks under the brand names Ribena and Lucozade.
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Coca-Cola, the American multinational, leads Kenya’s non-alcoholic ready-to-drink beverage market with a 65 percent market share, according to CAK figures.
It is followed by Delmonte, a subsidiary of U.S-based NutriAsia, with a 5.23 percent share, and Kevian Kenya, the maker of Afia juice, with a 4.4 percent share.
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