CAK approves acquisition of Jumra, Sojpar and Raisons Distributors by Kimo Kali
During merger analysis, and in order to determine the impact that a transaction will have on competition, the Authority said it identifies the relevant product market as well as the relevant geographical market
Kimo Kalí Holdings Limited, a subsidiary of agri-tech firm Twiga Holdings Limited, has been given unconditional approval by the Competition Authority of Kenya (CAK) to acquire direct control of Jumra Limited, Soljar Limited, and Raisons Distributors Limited.
In a statement, CAK said the approval has been granted based on the finding that the transaction is unlikely to negatively impact competition in the market for FMCG in Kenya, nor elicit negative public interest concerns.
Jumra Limited operates in the business-to-business wholesale distribution of fast-moving consumer goods including foods and beverages, personal and hygiene, beauty and cosmetics, household cleaning and care, and stationery within Nairobi County.
On the other hand, Soljar Limited is involved in business-to-business wholesale distribution of FMCG products including; food and beverages, personal care and hygiene, beauty and cosmetics, household cleaning and care, and stationery within Siaya, Kisumu, Vihiga, Kakamega and Busia counties.
Raisons Distributors Limited is involved in the business-to-business (B2B) wholesale distribution of FMCG products including food and beverages; personal care and hygiene; beauty and cosmetics; household cleaning and care; and stationery in Kwale, Mombasa, Kilifi, and Taita Taveta counties.
“The proposed transaction involves the acquisition of shares of Jumra, Soljar, and Raisons by Kimo Kalí. The transaction will enable Kimo Kalí to establish more efficient supply chains, lowering logistics costs, enhancing delivery times, and expanding access to previously underserved regions or customer segments,” the statement said.
“The transaction qualified as a merger within the meaning of sections 2 and 41 of the Competition Act Cap 504 of the Laws of Kenya. The Act stipulates that a merger, or takeover, may occur when an undertaking directly or indirectly acquires control over another business within Kenya. This may happen through, among others, purchase/lease of shares, exchange of shares, or vertical integration. Further, merging parties whose combined turnover or assets, whichever is higher, is over KES 1 Billion are required to seek approval from the Authority prior to implementing the proposed transaction. The transaction Kimo Kalí, and Jumra, Soljar, and Raisons, met this threshold for mandatory notification and full analysis as provided in the Competition (General) Rules. 2019.”
During merger analysis, and in order to determine the impact that a transaction will have on competition, the Authority said it identifies the relevant product market as well as the relevant geographical market.
“The relevant product market comprises products/services that are interchangeable or substitutable by the consumer due to their characteristics, prices and/or intended use. Based on this criterion, the relevant product market for the proposed transaction is the markets for fast-moving consumer goods in Kenya. Determination of the relevant geographic market involves interrogating the area in which merging parties undertake business and where competition conditions are sufficiently similar. With regard to the proposed transaction, the parties provide their products and services countrywide. Therefore, the relevant geographic market is national,” it added.
CAK noted that the market for wholesale distribution of FMCG in Kenya consists of large distributors and wholesalers operating through both traditional brick-and-mortar channels and digital platforms. Insights from the Authority’s investigation into the proposed transaction indicate that the wholesale distribution market remains fragmented and far from saturation, presenting opportunities for growth and enhanced competition.
Some of the major players in Kenya are Canini Haraka Enterprises Limited, Khetias, Gilanis, Mars Yetu, Kyosok Digital Services, Soljar, Twiga Foods Hashab Kenya (for Procter & Gamble), Mahlati Enterprises, RAA, Adamji Multi Supplies, Modern Holdings EA, Debonsham & Fear and Zanco. None of the player is noted as being dominant or having market power.
