Mauritius-based Phoenix Beverages Ltd (PBL), a subsidiary of IBL Ltd, can acquire minority control in African Originals, after the Competition Authority of Kenya (CAK) approved the deal.
- African Originals, incorporated in England and Wales, is the owner of Savannah Brands Company, which manufactures brands such as Kenya Originals.
- While Phoenix Beverages has no operations in Kenya, IBL Group has several investments in the country, including in Naivas Ltd.
- The deal will see PBL acquire 28.15% of Africa Originals.
“…the transaction is unlikely to negatively impact competition in the market for manufacture, processing, distribution, and sale of alcoholic ciders, alcoholic spirits and non-alcoholic ready-to-drink (NARTD) beverages,” the CAK said in a statement.
Although the deal will see PBL acquire a minority share, the CAK analysed it as a merger because in addition to the stake, PBL will acquire “minority controlling rights relating to, among others, budgets, annual business plans, and appointment of senior executives. This will result in de facto control.”
The transaction also met a different criteria for mergers as it is valued over KSh. 1 billion.
Why it Matters
Although Africa Originals/Savannah Brands’ market share is still small, its Kenya Originals cider brand has consistently grown in market share since the company was founded in 2019.
The brewer has also introduced new products including Kenyan Originals Gin and Kenyan Originals Iced Tea and Tonic, as it seeks to stamp its market presence.
Phoenix’s parent company IBL, a publicly listed company in Mauritius, has invested in Naivas’ phenomenal growth as it seeks to fill the gap in the retail sector. But the beverage market has major existing players and brands, which may make the experience harder than it was in retail.
