Competition Authority of Kenya (CAK) has approved TPG Capital’s subsidiary Pledge Holdco Ltd take part in running the business that distributes milk and milk-related products across Kenya, Uganda, and Zambia. US-based TPG Capital has bought a 33.9 percent stake in dairy processor Maziwa Ltd, a year after it purchased a 44.04 percent stake in Cellulant Corporation.
“The Competition Authority of Kenya has approved the proposed subscription of 33.9 percent of the issued share capital and joint control of Maziwa Limited by Pledge Holdco Limited unconditionally,” said the approval signed by CAK director-general Wang’ombe Kariuki.
In its disclosures, TPG Capital said it also has interests in Kenya’s Dodla Dairy Ltd, thanks to a 2017 purchase of a Sh5 billion stake in India-based parent company, where it processes one million liters of fresh milk daily received from 250,000 farmers.
The CAK said TPG’s entry into the Kenyan market will not give it unfair advantage over its competitors since Maziwa Ltd is a minority player with 0.9 percent market share to Brookside Dairy’s 40 percent, Sameer (14 percent), New KCC (25 percent), Githunguri (12 percent) and Pascha’s 1.7 percent.
“Post-transaction, the merged entity will have a market share of 3.9 percent. This is unlikely to raise competition concerns since its market share will be considerably low. Further, it is anticipated that the merged entity will face competition from processed milk players as well as informal milk producers,” says the CAK report.
Maziwa, wholly-owned by Mauritius-based Bainne Ltd distributes milk and milk-related products under the brand name ‘Lola’.