Kitui Flour Mills has received the green light from the Competition Authority of Kenya (CAK) to fully acquire Rafiki Millers, which ceased operations in 2021.
The move is strategically aimed at fortifying Kitui Flour’s presence in the wheat milling market, but it has raised concerns about potential long-term competitive impacts.
While Rafiki Millers held a modest 3 percent market share, the amalgamated entity will now command a 13 percent share, solidifying Kitui Flour Mills as the third-largest player, trailing Mombasa Maize Millers with 22 percent and Grain Industries Limited at 15 percent.
The CAK granted approval after determining that the transaction is unlikely to have adverse effects on competition in the wheat milling market.
Additionally, the authority considered potential negative public interest concerns, key factors in the merger analysis.
“The authority approved the proposed acquisition of 100 percent shareholding in Rafiki Millers Limited by Kitui FFlour Mills Limited unconditionally,” said the CAK in a statement on Monday.
The Kenyan grain milling sector boasts over 40 formal millers with a collective capacity to mill over 85 percent of the country’s total volume. The approval underscores Kitui Flour Mills’ strategic move to strengthen its market position, currently third largest in the country.
The CAK’s approval marks a significant milestone for Kitui Flour Mills whose combined assets now hits a Ksh.1 billion mark – enhancing its competitiveness in Kenya’s dynamic flour milling landscape.
The transaction is expected to bring operational synergies and contribute to the overall efficiency of the combined entity.