The Competition Authority of Kenya (CAK) has approved the acquisition of paintmaker, Sadolin Kenya by Osaka-based Japanese paint and coatings manufacturer Kansai Paint.
Kansai’s South African subsidiary Kansai Plascon Africa is also preparing to acquire Sadolin Uganda and Tanzania.
The CAK, in a gazette notice on Friday, cleared the transaction, indicating Kansai Plascon Africa entry into Kenya’s multibillion shilling paints business will not negatively affect competition.
“It is notified for general information of the public that the Competition Authority of Kenya has approved the proposed acquisition of the entire issued share capital of Sadolin Paints (EA) Ltd by Kansai Plascon East Africa Ltd,” said CAK director-general Wang’ombe Kariuki.
Other major players in the industry are Crown #ticker:BERG and Basco.
Although the transaction price is yet to be disclosed, persons familiar with the regional operation estimated it to have cost $125 million (Sh12.5 billion).
The Tokyo Stock Exchange-listed firm that employs nearly 12,000 workers has been operating since 1918 with units in several countries.
The Financial Times of London estimated the combined revenues of the East African companies at $87 million (Sh9 billion) as at 2016.
The three companies pay royalties to the Sadolin Group, owned by Dutch multinational Akzo Nobel, to use the name.
The three firms focus on interior paint and mainly serve their respective countries.
They employ about 700 people. The move is expected to give the Japanese firm a foothold in East Africa (EA).
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