NAIROBI, Kenya, Sept 11 – The Competition Authority of Kenya (CAK) has approved the acquisition of a 65 percent stake in East African Breweries Limited (EABL) by Japanese brewer Asahi Group Holdings Limited.
The approval allows Asahi to acquire sole control of Diageo Kenya Limited and UDV (Kenya) Limited.
CAK said it assessed the impact of the transactions on competition in the production, distribution and retail of beer and cider, as well as the production and supply of malt and brewing grains.
The regulator also considered the potential impact on small businesses, employment and investment in Kenya.
While CAK approved the takeover of UDV (Kenya) Limited unconditionally, it approved the acquisition of Diageo Kenya subject to conditions aimed at protecting competition in the retail market.
Under the conditions, the merged company must reserve at least 20 percent of refrigeration space provided to retail outlets for beer and cider brands that are not owned by EABL or Asahi.
The condition will not apply to top-end drinking establishments, supermarkets, liquor stores located at petrol stations and hotels rated above two stars.
CAK also directed that, before the transaction is completed, sufficient funds from the sale proceeds be set aside to settle any outstanding liabilities.
The funds should also ensure that the transaction does not disrupt supplies and services or affect the growth and sustainability of small and medium-sized enterprises.
