Ramco Plexus, an investment holding company for printing and packaging business under conglomerate Ramco has received the regulatory approval to buy out Platinum Packaging in a transaction that sources estimated at about Sh500 million.
The Competition Authority of Kenya (CAK) allowed Ramco Plexus to buy out the 50 per cent stake held by Carton Manufacturers in the packaging and labelling firm. Ramco and Carton Manufacturers currently own Platinum Packaging on a 50/50 basis.
“The proposed transaction involves the acquisition of sole control of Platinum Packaging by Ramco Plexus, resulting in a change from joint control to sole control. The parties combined value of assets is over Sh1 billion and therefore meets the thresholds for a full merger notification as provided for in the Merger Threshold Guidelines under the Competition (General) Rules, 2019.” said the CAK in a note approving the transaction.
Kenya’s competition law requires that firms in merger undertakings, which have combined assets or turnover of at least Sh1 billion, to seek approval from the CAK before executing the deal.
The merged entity will have more than Sh1 billion in assets, but will still control less than 10 per cent market share.
“Whereas the acquirer [Ramco] has control of the target [Platimum], the parties’ market share will not change. Additionally, the merged entity will face competition for the other market players controlling 93 per cent of the market as well as from imports and players. Premised on the foregoing, it is the Authority’s view that the proposed transaction is unlikely to substantially lessen or prevent competition in the flexible packaging market in Kenya.” CAK ruled.
Platinum Packaging, which runs stores countrywide, controls a seven per cent share in Kenya’s crowded market for flexible packaging and labelling products. This places it among the joint market leaders in the industry dominated by family-owned enterprises.
Ramco Plexus oversees operations in more than a dozen subsidiaries dealing in the printing and packaging business under the Ramco stable, while Platinum supplies flexible packaging solutions in reels, pouches, digital labels and sleeves.
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