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Daily Nation : February 10th 2014
28 | BUSINESS GREEN LIGHT | Al-Futtaim gets go-ahead to buy troubled motor dealer CMC Motors Business climate sparks acquisition frenzy in Kenya Competition authority approves plans for six firms to undertake takeovers locally BY JOSHUA MASINDE email@example.com unlisted companies seek the nod of the competition authority to acquire other firms locally. Already, the watchdog has approved plans for six entities to undertake acquisitions in Kenya, signalling the firms’ prospects to increase their market share in the market. In a Gazette notice A published last Friday, the authority gave Dubai-based vehicle giant, Al-Futtaim, the go ahead to buy troubled motor dealer, CMC Motors. It also gave other entities the green light to undertake acquisitions, these include Centum and Arte-Caffe to buy Genesis Investment Management and seven Dormans Sh7.5bn n improving business climate in Kenya has seen both listed and coffee shops respectively. The authority also gave global media firm, Cavendish Square Holding approval to acquire 16.484 per cent additional shares in ScanGroup. A Sh1.8 billion deal to increase the stake of global communications firm, WPP, in Scangroup, a media services investment was completed in December 2013. The transaction, executed through Cavendish Square Holding, a wholly owned unit of WPP, raised WPP’s shareholding in Scangroup to 50.1 per cent from 33.616 per cent. “Some of the acquisitions are of strategic nature while others are meant to increase the market share of the firms in question. For others, especially the unlisted, it’s more of consolidation of their businesses amid increasing competition,” said Mika Davis, analyst at Contrarian Investing. Also given the nod is Jo- hannesburg-Exchange-listed consumer firm, Tiger Brands, to acquire 100 per cent stake in both Rafiki Mills and Magic Oven Bakery. The deal consolidates Tiger Brands flour milling and bakery business in Kenya. Tiger Brands is a giant fast-moving consumer goods maker in sub-Sahara Africa. The acquisition of CMC Value of cash offer that AlFuttaim gave last year to buy 100 per cent of issued shares in troubled CMC Motors by Al-Futtaim comes on the back of the latter’s plans to join the second-hand motor vehicle business in Kenya, where its sees a big opportunity. Al-Futtaim hopes that all of CMC’s shareholders will ACQUISITIONS Takeover deals in the market Auto: Dubai-based car dealer Al-Futtaim gets nod to buy CMC Motors. Fund managers: Centum plans to acquire Genesis Investment Management, an entity that manages over Sh100 billion fund. Manufacturing: Johannesburg-listed Tiger Brands approved to take over Rafiki Mills and Magic Oven Bakery. Beverage sector: ArteCaffe to buy seven Dormans coffee shops. Media: Cavendish Square Holding to buy 16.484pc additional shares in ScanGroup. agree to sell their stake by mid this month paving the way for it to expand its motor vehicle empire in Kenya and East Africa, too. Last year, the Dubai-based family owned firm made a Sh7.5 billion cash offer for purchase of 100 per cent of issued shares in CMC Motors. Already, 50.6 per cent of CMC’s shareholders have approved the acquisition. Al-Futtaim had indicated that many shareholders had agreed to sell their stake in the motor dealer that is still serving suspension from the Nairobi Securities Exchange. Its suspension followed eruption of boardroom wrangles in 2011, which have since cost it a lucrative franchise — Land Rover Defender, Jaguar and Range Rover brands — to rival, RMA Group. On successful completion of the takeover, CMC Holdings will de-list from the Nairobi bourse. Meanwhile, the approval for acquisition of seven Dormans coffee shops by Arte-Caffe will see the latter’s outlets rise to 11. The deal happens almost two years since a 90 per cent acquisition of Nairobi Java House by Emerging Capital Partners, a US-based private equity company. Investment firm, Centum, DIANA NGILA | NATION Al-Futtaim director for corporate development Mawrwan Shehadeh. The firm hopes to take over CMC Motors this month. will also acquire a 73.35 per cent stake in Genesis, an investment management services entity that manages over Sh100 billion worth of funds. Five other firms have been given an exemption from the authority’s regulatory requirement as the “proposed acquisition will not affect competition negatively,” the Competition Authority of Kenya said. Last year saw a lot of acquisitions and mergers with AccessKenya exiting the stock market. This has affirmed Kenya’s significance as a lucrative investment destination especially with the discovery of oil. Pyrethrum trade gets Sh300m shot in the arm BY NATION CORRESPONDENT About Sh300 million has been invested in pyrethrum farming in 18 counties with a view of reviving the business. The money will be used to pay arrears owed to farmers as well as fund service provision under the Kenya agricultural productivity and agri-business project. Speaking to pyrethrum farmers in Nyeri, the project’s coordinator Jane Ndung’u who is spearheading revival of the trade in the region said Sh2 million had been set aside for service provision in the county and a further Sh1.47 million will cater for the day- to-day transactions. The programme will offer extension services to pyrethrum farmers through public-private partnership. Ms Ndung’u urged growers to form one cooperative society at the county level in order to pool resources and boost incomes: “We are small-scale farmers and we require volumes in order to make the processing of pyrethrum viable. We need to form a cooperative society at the county level,” she said. Already, Sh11 million has gone into pay- ment of farmer’s 2010 arrears. Dues for September to December 2011 are yet to be paid but the government has honoured the growers’ deliveries for January to May 2013 according to Nyeri County pyrethrum field officer Stephen Kyalo. Among other measures that the govern- ment plans to take in order to revive growing of the crop is to establish a nursery to ease seedling availability. Currently, there is no operational nursery in Nyeri County forcing farmers to rely on seedlings from fellow growers. A sachet of pyrethrum seeds costs Sh60 while a seedling attracts Sh1 with clones going for Sh3 a piece. A farmer needs about Sh22,000 to plant a quarter acre of pyrethrum farm. DAILY NATION Monday February 10, 2014 YUMOBILE STAFF BLOCK BID TO SELL STAKE OF THE FIRM Essar Telecom Kenya has been looking for a buyer for a part of its local business. P.29 Family Bank eyes Sh5bn in deposits via PesaMob BY NATION CORRESPONDENT Family Bank projects to mobi- lise Sh5 billion in deposits by the end of this year through its mobile banking platform, PesaMob. So far, the system, which allows both existing and non-Family Bank customers to open accounts, transfer funds or borrow loans via their handsets, has mobilised over Sh100 million in deposits according to the bank’s chief executive Peter Munyiri. Within a month of piloting the service, about Sh100 million loans have been issued. The service has managed to recruit over 50,000 customers according to Mr Munyiri since its launch in December 2013. The target is to reach three million customers by end of this year. We are in partnership with different partners including the telecoms.” Family Bank chief executive Peter Munyiri “That is significant because no bank in this market, without channels like this one, has the capacity to serve three million customers with very limited branch network,” Mr Munyiri said in an interview with Nation. “We are in partnership with different partners including the telecoms. But there are other partners beyond the telecoms because software applications have to come into play,” Mr Munyiri said. The platform, which targets the mass market, allows savings of as low Sh10. Mobile banking is gaining momentum as financial institutions move to migrate banking services from brick and mortar outlets to the mobile phone.
February 9th 2014
February 11th 2014