Pearl Dairy, the Ugandan-based manufacturer of Lato milk, is solidifying its foothold in Kenya through the acquisition of a Nyamira-based plant.
The company has been leasing Highland Creamers and Food Limited since 2020 for processing of their Lato brand in Kenya after restrictions imposed on exports by Kenyan authorities in 2019, and now is seeking full ownership.
The company has formally applied for the acquisition of Highland Creamers & Food Limited, marking a significant development in its expansion strategy.
This move precedes the acquisition process, allowing the firm to preemptively address regulatory hurdles.
Both the Comesa Competition Commission (CCC) and the Competition Authority of Kenya (CAK) have acknowledged receipt of the acquisition notification from Pearl Dairy, submitted through, Maziwa, a non-operating holding company incorporated in Mauritius.
Director General of CAK, Adano Roba, commented on the notification, stating, “We received the notification yesterday (Wednesday), and I have already shared it with my officers for necessary action.”
The proposed acquisition aims to secure a 100 percent stake in Highland Creamers, setting the stage for heightened competition in the raw milk sector within Kenya.
Pearl Dairy highlighted in its notification to CCC that this move would establish a dual-country manufacturing setup, streamlining turnaround times for customers and enhancing value-addition in both Kenya and Uganda.
CCC, in an interview with the Business Day Africa, said a thorough examination of the merger’s impact on competition in Kenya is underway.
“We shall be scrutinizing issues of dominance and other competition-related matters before rendering our verdict,” said CCC.
This development follows concerns raised by Kenyan farmers in 2019 regarding the influx of low-cost Ugandan milk, which contributed to a drop in the price of a liter of milk to a low of Ksh19.
The prices have so far rebounded, with the same quantity now going for over Sh35.