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April 15, 2021

Dairiboard plan to merge with Zimbabwe rival Dendairy still in discussion

By Dean Best

A merger between Dairiboard Holdings and Dendairy, Zimbabwe’s two-largest dairy companies, is still on the cards almost a year after the planned deal was first muted.

Publicly-listed Dairiboard in Harare, which is seeking to acquire and merge Kwekwe-based Dendairy into its own business, issued another cautionary stock-exchange filing this month noting the two parties are still in discussions. The first advisory went out in July last year.

The proposed deal will still need the approval of Zimbabwe’s competition authority once the companies form an agreement.

Dendairy was founded in 2004 and is majority-owned by the Coetzee family, while Spear Capital, a Scandinavian private-equity firm, holds 27% of the business acquired in 2015. The company’s branded product range includes milk, butter, ice cream, yogurt, juices and shakes.

Dairiboard, meanwhile, went public in 1997 and operates three local factories loacted in Harare, Chitungwiza and Chipinge, producing similar products to the merger target but also manufactures sauces, condiments and peanut butter, all serving the retail and foodservice channels.

Its milk brands feature Steri Milk, Dairiboard Chimombe and Lacto, amongst others. Its other food brands include Yu-mmy, Devine and RabRoy.

Dairiboard exports to Zambia, Botswana, Mozambique and South Africa.

In its most recent financial statement for the six months ended 30 June, Dairiboard posted inflation-adjusted revenues of ZWL1.23bn (US$3.8m), a decline of 14.7% on the same period a year earlier. EBITDA increased 69.2% to ZWL125.5m but the company delivered a net loss of ZWL478,000 versus a ZWL55m profit the previous year.

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