The competition watchdog noted that Pearl is not a significant buyer and that there were other players in the market which will ensure there is continued competition.
The Comesa Competition Commission has approved the proposal by Uganda’s milk processing firm, Pearl Diaries Limited that owns the Lato brand to acquire a Kenyan milk company.
This means that Maziwa, the non-operating holding company incorporated in Mauritius, will acquire 100 percent stake in Highland Creamers & Food Limited— a Kisii-based firm that is behind the Farmily Milk brand.
“The CID (Committee Responsible for Initial Determinations) 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,” said the Commission in a March 11 approval notice.
In Uganda, Maziwa collects, processes and sells milk and milk products under its subsidiary Pearl Dairy Farms Limited. It has been depending on the Kisii firm to help it sell its products in Western Kenya.
The competition watchdog noted that Pearl is not a significant buyer and that there were other players in the market which will ensure there is continued competition.
The Commission said it also considered submissions from the national competition authorities of Egypt, Kenya and Malawi, all which did not raise any concerns in relation to the transaction.
“Further, it was evident from the parties’ submission and from 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,” said the Commission.
Kenya in March allowed Uganda’s Lato milk to invest in struggling local dairy factories to improve competition in the dairy sector after a meeting between Trade and Investments Cabinet Secretary Moses Kuria and Uganda’s Treasury Permanent Secretary Ramadan Ggoobi. Pearl signed a deal with the state-owned financier Kenya Development Corporation to invest jointly in local dairy ventures
Pearl, whose main factory is in Mbarara, is currently one of the biggest dairy exporters in the region, with its products on the market in Egypt, Kenya, Tanzania, DRC Congo, Zambia, Ethiopia, South Sudan and Malawi.
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