Danone buys Kenyattas out of Brookside Tanzania

Brookside factory in Ruiru, Kiambu. FILE PHOTO | NMG

By MUGAMBI MUTEGI

More by this Author

Summary

• Move leaves French firm in full control of business they jointly owned
• If successful, the transaction will leave Danone as Brookside’s minority partner in Kenya and Uganda while fully owning the Tanzania business.
• Brookside’s divestiture from Tanzania comes against the backdrop of lukewarm diplomatic relations between Kenya and its southern neighbour.

Dairy processor Brookside is preparing to exit the Tanzanian market with the sale of its entire stake in the subsidiary to French partner Danone.

Danone, which bought a 40 per cent stake in Brookside Dairy’s business three years ago, has written to Tanzania’s Fair Competition Commission (FCC), expressing its intention to fully acquire the business for an undisclosed amount.

“The FCC has received notification that Brookside Holdings Limited of Dubai, United Arab Emirates, intends to acquire 100 per cent of the issued share capital in Brookside Dairy Tanzania Limited,” the competition watchdog said in a notice.

“Brookside Tanzania is in the business of purchasing, distributing and selling dairy products in Tanzania and the FCC is currently investigating the intended acquisition.”

Danone is buying the stake through Brookside Holdings which, despite having similar names as the Kenyan dairy giant, is a fully-owned subsidiary of the French food conglomerate.

READ: Brookside gets access to French partner’s flavours

Brookside Dairies is majority-owned by the Kenyatta family.

If successful, the transaction will leave Danone as Brookside’s minority partner in Kenya and Uganda while fully owning the Tanzania business that has been facing challenges since its establishment in 2004.

Brookside’s divestiture from Tanzania comes against the backdrop of lukewarm diplomatic relations between Kenya and its southern neighbour.

The two countries have developed mutual suspicion arising from differences over Uganda’s decision to abandon a joint plan to build a multi-billion shilling crude oil pipeline through Kenya in favour of Tanzania and Dar es Salaam’s refusal to ease its tough work permit regulations for Kenyans.

Ruiru-based Brookside gained a footing in Tanzania after it acquired the Arusha plant of the defunct State-owned Tanzania Dairies, promising to rehabilitate the firm and eventually install an ultra-heat-treated (UHT) milk processing factory.