Uganda's leading milk processing company, known for its Lato brand, has recently received approval to acquire a prominent Kenyan milk company, marking a significant milestone in its expansion efforts across borders.
The approval from the Comesa Competition Commission, dated March 11, paves the way for Maziwa, the holding company based in Mauritius, to secure a 100 per cent stake in Highland Creamers & Food Limited.
This acquisition allows Lato, through its subsidiary Pearl Dairy Farms Limited, to overcome challenges previously encountered in the Kenyan market, ensuring a smoother supply and distribution of its products.
"The CID determined that the merger is not likely to substantially prevent or lessen competition in the Common Market or a substantial part of it, nor will it be contrary to the public interest," stated the Commission, highlighting the regulatory clearance granted for the transaction.
Highland Creamers & Food Limited, based in Kisii and known for its Farmily Milk brand, commenced operations in 2015, establishing itself as a key player in the Kenyan dairy industry.
With this acquisition, Lato aims to leverage the existing infrastructure and market presence of Highland Creamers to strengthen its foothold in Western Kenya.
While Maziwa has been depending on the Kisii-based firm to facilitate the sale of its products in the region, the competition watchdog emphasised that the market remains open and competitive, with numerous players ensuring continued dynamism and choice for consumers.
Furthermore, the approval process involved thorough consideration of submissions from national competition authorities, including those of Egypt, Kenya, and Malawi, all of which expressed no significant concerns regarding the transaction.
"Further, it was evident from the parties’ submission and the submissions by the Competition Authority of Kenya that the market was fragmented with numerous competitors who would continue to exert competitive pressure on the merged entity," affirmed the Commission.
This strategic move comes approximately a year after Kenya welcomed investment from the Ugandan dairy giant, demonstrating the growing collaboration between the two countries in the dairy sector.
Pearl Dairy Farms Limited previously inked a partnership with Kenya Development Corporation to jointly invest in local dairy ventures, reflecting a commitment to enhancing the dairy value chain and fostering economic growth.