This archive report was first published on 28 October 2019.
On October 28, 2019, the Competition Authority of Kenya (CAK) approved a proposed 50:50 joint venture deal between Vivo Energy and Kuku Foods, which operates outlets franchised from American fast food chain Kentucky Fried Chicken.
Through the merger deal, Vivo Energy plans to invest in increasing KFC's outlets in major towns in Kenya, Uganda, and Rwanda, amid growing demand for fast food services.
According to the CAK, the proposed transaction is unlikely to raise competition concerns and will not have an impact on the market share of the merged entity, given that the target is only active in the fast food restaurant business locally.
The fast food business is dominated by Java with a market share of 34%, followed by Innscor with 16%, and KFC with 15%.
Through the proposed investment, Vivo Energy aims to increase KFC's outlets from the current 24 in Nairobi, Mombasa, Nakuru, Eldoret, Kisumu, and Nanyuki.
The CAK has also approved the proposed subscription of 33.9% of the issued share capital and joint control of Maziwa Limited by Pledge Holdco.
On the other hand, Pledge Holdco Limited is wholly-owned by Texas Pacific Group, which controls several entities in Kenya, including Dodla Dairy Limited and Cellulant Corporation.
