Coca Cola has been given an ultimatum by the Competition Authority of Kenya (CAK) to retain employees working at Almasi Beverages Limited ahead of its planned acquisition of the firm from Centum Investments.
While approving the acquisition deal estimated to be worth Ksh. 19.5 billion, the CAK ordered Coca Cola not to lay off 1,739 Almasi employees, representing 99 percent of staff at the bottling company.
“The merged entity shall for a three year period following completion of the proposed transaction retain 1,739 employees of the total 1,760 permanent employees,” CAK said.
CAK similarly ordered the merged entity to protect the interests of Small and Medium Enterprises (SMEs) once the acquisition deal is finalized.
“The merged entity shall reserve the lower deck, or not less than 20 percent of the total storage space of the coolers lent to SMEs for products of competitors except the brands of the Coca Cola Company’s three largest global non-alcoholic ready to drink competitors,” CAK added.
Under the deal set to be concluded in 2020, Centum will sell its stake in Almasi Bottlers Limited (ABL) and Nairobi Bottlers Limited (NBL) to Coca-Cola Sabco East Africa Limited, a subsidiary of Coca Cola Beverages Africa Limited (CCBA). The Nairobi Securities Exchange (NSE) listed company currently holds 53.9 per cent of the issued shares at ABL and a 27.6 per cent stake in NBL. As it stands, Coca Cola Sabco holds a 72.4 per cent stake in NBL and with the deal approved it will control 100 per cent of the company’s shares. Centum originally acquired stake in the two bottlers in a joint investment worth Ksh. 3.4 billion.
“Centum Investments Company PLC is pleased to announce that it has entered into an agreement to sell all of its shareholding in Almasi and Nairobi Bottlers to Coca Cola Sabco East Africa Limited. The achieved exit valuation speaks to the success of our investment cycle and portfolio management strategy that included consolidation of three bottlers into Almasi Beverages and acquisition of majority stake in the business,” Centum CEO James Mworia said in a statement in June this year.