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November 1, 2019

Private-equity house TPG lines up investment in Kenyan dairy firm Maziwa

TPG, the US private-equity major, has snapped up a minority stake in a dairy firm in Kenya, according to a filing from the local competition regulator.

By Dean Best

TPG, the US private-equity major, is set to snap up a minority stake in Maziwa, a dairy firm in Kenya, according to a filing from the local competition regulator.

The Competition Authority of Kenya said it had approved TPG’s proposed acquisition of 33.9% of Maziwa. Financial terms were not disclosed.

The competition watchdog said Maziwa holds “a significant stake” in Musty Distribution Ltd., a Kenyan company which distributes dairy products in Kenya, Uganda and Zambia under the Lola brand name.

TPG already controls another company doing business in Kenya’s dairy sector, Dodla Dairy. The regulator said the investment in Maziwa would result in “joint control, with other shareholders” of the dairy firm and therefore qualified as a merger under Kenyan legislation. 

However, it said the combined market share of Maziwa and Dodla would be 3.9% for processed milk and 1.5% of milk-related products such as butter and cheese.

The watchdog said the transaction would be “unlikely to lead to substantial lessening or prevention of competition” in either category.

Data from the Kenya Dairy Board says Brookside Dairy has 40% of the country’s market for processed milk, with New Kenya Co-operative Creameries Dairy holding 25% of the market and Sameer Agriculture & Livestock another 14%.

The board says Brookside Dairy accounts for 45% of the market for milk-related products, followed by Sameer Agriculture & Livestock at 18% and Githunguri Dairy Co-operative at 8%.

TPG could not be reached for immediate comment.

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