Danone buys 40pc stake in Brookside Ltd
By Stanley Wabomba
The world’s biggest yoghurt maker Danone says it is buying a 40 percent stake in Brookside, which is East Africa’s top dairy producer, as part of plans to expand in new markets amid weak growth in Europe and a slowing economy in China.
The deal, whose financial terms were not disclosed, is expected to boost the French food group Danone’s earnings.
Founded in 1993 in Kenya, Brookside, which also exports to Uganda and Tanzania, has a portfolio spanning from fresh to powdered milk, yoghurt and butter.
Brookside has a market share of about 40 percent of the Kenyan dairy market.
The firm has a distribution network of more than 200,000 outlets in Kenya and serves over 140,000 farmers. The Kenyan firm has in recent months acquired several dairy firms such as SpinKnit Dairy, Buzeki Dairy, Ilara and Delamere.
In January this year, Brookside announced a deal that would see it control operations of Limuru Dairy for the next ten years.
The firm has also been eyeing the Nigerian market where it plans to set up a milk processing plant next year.
French Farm Danone announced that it has acquired a 40 percent stake in Brookside Dairy on Friday.
The French firm says the deal with Brookside would enable it expand its presence in Africa after buying a stake in a Ghanaian milk producer nine months ago.
Emmanuel Marchant, Danone’s vice-president for corporate development, told Reuters that the deal, whose financial terms were not disclosed, had been sealed.
Under the deal, Dubai equity firm Abraaj Group, which is Danone’s partner in the Fan Milk venture and is also a longtime investor in Brookside, will retain its 10 percent stake in Brookside, while the Kenyatta family, which before the deal owned a 90 percent stake, will retain the rest of the shareholding.
Over the past two years, Danone, which generates 60 percent of its turnover in emerging countries, has invested more than a billion euros in Africa.
Last year the owner of yoghurt brands such as Activia and Actimel bought a 49 percent stake in Fan Milk International, a frozen dairy products and juices maker in West Africa, with sales of 120 million euros.
Danone also paid 550 million euros to take control of Morocco’s top dairy firm, Centrale Laitiere.