The Competition Authority of Kenya (CAK) has unconditionally approved the acquisition of 98.56 percent of shares of Lipton Teas and Infusions Kenya Plc by a UAE-incorporated firm B Commodities ME (FZE).
In an official statement released via X on Monday, CAK gave a nod for the acquisition indicating that the transaction will not negatively impact the country’s market for tea production and processing. Furthermore, CAK reports that the acquisition will not be contrary to the public interest.
“All the 9,715 employees of Lipton Teas and 405 employees of Limuru Tea will be retained under their current terms at the time of the transaction,” noted CAK.
B Commodities ME is a subsidiary of Browns Investments PLC, a leading investment company in Sri Lanka. In Kenya, the company controls various firms including Browns Pl Limited, Browns Plantations Kenya Limited, and LOLC Kenya Microfinance Bank Plc. Lipton has been actively involved in the production and procession of black, white, and green tea.
An agreement for the merger was announced in May this year. However, under Kenya’s Competition Act, merging companies with combined assets or turnover of over Kes 1 billion must seek approval from the CAK before the acquisition. The transaction between Lipton and B Commodities Me met the threshold the threshold for mandatory analysis by CAK.
According to B Commodities ME, the acquisition provides an opportunity to deploy its unique experience and record in agribusiness to increase its tea production capacity. Lipton’s sell-off is part of a strategic mover for the company to shift its focus from tea production to brand management.
The acquisition comes as the Kenyan government plans to increase the country’s tea export market, primarily through value addition. Kenya produced over 450 million kilograms of tea in 2022 and earned about Kes 163.3 billion in export earnings, according to a report by the Agriculture and Foods Authority.
