Browns company gets exemption on Limuru Tea takeover

Capital Markets Authority (CMA) Chief Executive Officer Wycliffe Shamiah.

Photo credit: File | Nation Media Group

The Capital Markets Authority (CMA) has granted B Commodities, an affiliate of Sri Lanka-based Browns Investment Plc, exemption from a requirement to make an offer to acquire the remaining shares of Limuru Tea.

CMA take-over regulations require an entity acquiring more than 50 percent of the shareholding of another to acquire the remaining stake or apply for exemption from buyout.

Browns through its ownership in B Commodities indirectly acquired 51.99 percent of the issued share capital of Limuru Tea when it took over the tea estates and factories owned by Lipton Teas and Infusions in Kenya, Rwanda, and Tanzania.

Lipton Kenya held the beneficial shareholding in Limuru Tea, hence requiring B Commodities to apply for the regulatory exemption having indicated its intention not to take over the firm.

“B Commodities hereby announces that the Capital Markets Authority has granted exemption from the requirements to make a takeover offer for Limuru Tea on the grounds set out by the Take-over Regulations. As a result, B Commodities will not be making a take-over offer for Limuru Tea which will remain listed on the Nairobi Securities Exchange (NSE),” the firm said in a notice on Tuesday.

Last month, B Commodities and Ekaterra, which owns 98.56 percent of Lipton Teas and Infusions Kenya Plc, entered a share purchase agreement acquiring Lipton’s shareholding and the indirect controlling stake in Limuru Tea.

The deal to acquire the tea business sought to expand Brown’s industry position in the tea cultivation and agro-processing sector.

Before the transaction, Browns Investments already owned Muturata Plantation, the tea estates formerly owned by James Finlay in Kericho and Bomet counties.

B Commodities had noted that it had no intention of either making a take-over offer for Limuru Tea or changing the listed status of Limuru Tea on the NSE.

The deal is expected to push Brown’s processing capacity to 87 million kilograms of tea, making it one of the world’s largest tea companies.

Lipton Kenya estates comprise 11 plantations and eight factories across Kericho, Bomet, and Limuru counties which represent the country’s tea-growing heartland.

15 percent of the assets acquired by Browns are to be reserved for communities where the estates are situated through a Community Welfare Trust.

CVC had acquired the Lipton estates as part of a Sh628.3 billion (€4.5 billion) purchase of Unilever’s tea division, then named Ekaterra in 2021.

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