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Africa’s wealthiest businessman, Aliko Dangote, is making a major investment move into Kenya’s food and beverage industry.
A private equity firm backed by Dangote, Alterra Capital, is in the process of acquiring a majority stake in Java House, a leading East African restaurant chain, from UK-based Actis.
The transaction, also involving Phatisa, another private equity fund, is awaiting regulatory approval.
Dangote's Foray into Kenya’s Consumer Market
With a net worth of $10.7 billion (Sh1.3 trillion), according to Forbes, Dangote has previously explored investment opportunities in Kenya’s cement and mining industries, however, they fell through.
However, this acquisition provides him with a direct entry into the region’s thriving food sector.
Java House Brand Portfolio
Java House, initially launched as a single coffee shop, has grown into a regional powerhouse with 73 outlets across Kenya, Uganda, and Rwanda.
The acquisition doesn’t just include Java House but also several subsidiary brands, including:
Planet Yogurt in Kenya.
Three Sixty Degrees Pizza in Kenya and Rwanda.
Kukito Africa in Kenya
Foodscape Africa 2 (Foodscape) is a centralised procurement and commercial production kitchen producing baked goods, coffee and cooked food.
The deal is currently undergoing review by the Comesa Competition Authority (CCA).
If approved, it will allow Actis to exit while Alterra and Phatisa assume control, positioning Java House for future expansion.
According to the parties involved, this deal will allow the seller to exit and realise their investment, while Alterra and Phatisa plan to enhance Java House’s operations in the region.
The investment marks Alterra’s first foray into the Common Market for Eastern and Southern Africa (COMESA) region.
"The firm targets investments across diverse sectors, including food and beverages, hospitality, retail, telecommunications, technology, financial services, consumer products and services, infrastructure services, and logistics," the Comesa Competition Authority said in a statement.
The Phatisa Group, however, has an established presence in the region, operating in Kenya, Zambia, Malawi, and several other African countries.
As part of the deal, Alterra and Phatisa aim to accelerate Java House’s business growth, expand its footprint, and enhance the brand’s offerings across the region.
Regulatory assessment
The Commission will assess whether the transaction could substantially lessen competition or be harmful to the public interest.
Interested stakeholders, including competitors, suppliers, and customers, are encouraged to submit written representations regarding the deal.
The deal has the potential to reshape Kenya’s restaurant and food service industry, bringing further investment into the region and opening doors for expansion across East Africa.
The final approval of the transaction is expected soon, after which Alterra and Phatisa will look to execute their strategy for business growth.