UK multinational James Finlay received $23.6 million (Sh3.1 billion) in last year’s sale of its Kenya tea business to Sri Lanka’s LOLC Holdings, according to a new disclosure from DealMakers Africa magazine.
The parties had not disclosed the value of the deal when it was announced. DealMakers Africa revealed it in its review of the top deals in the continent last year.
“Scottish multinational, James Finlay announced its partial exit from the Kenyan market last year … The deal is valued at $23.6 million,” the magazine said of the transaction. Law firm Bowmans, which was an adviser in the deal, did not respond to our queries by the time of going to press.
LOLC Holdings took an 85 percent stake in James Finlay Kenya, with the parties ceding a 15 percent stake to the local community in what is seen as a move to improve relations amid emotive and historical land disputes.
The community holds the minority stake through Kipsigis Highlands Multipurpose Co-operative Society.
“The Kipsigis Highlands Co-operative will have a say in the management of the tea estates, and will receive a share of the profits,” DealMakers Africa said.
“This will not only positively impact the livelihoods of the community, but also promote sustainable agriculture practices in the region.”
The major foreign-owned agricultural firms, most formed in the colonial era, have come under pressure to appease local communities as population growth drives up demand for land.
American-owned fruit processor Del Monte, for instance, has ceded hundreds of acres to the residents of Kiambu and Murang’a through their respective county governments.
Several groups and associations have also petitioned the National Land Commission (NLC) to help them take ownership of several parcels of land currently owned by Kakuzi Plc on the basis of historical land injustices.
The matter is yet to be resolved.
“Various parties have lodged claims at the NLC against the group, potentially affecting the land on which it carries out its business,” Kakuzi says in its latest annual report.
“The group has instructed its legal advisers to represent it in these matters. The directors, in consultation with professional legal advisers, believe that the group has a reasonable chance of successfully defending these claims.”
The parties that have petitioned NLC with regard to the company’s land parcels include Kakuzi Division Development Association, Makuyu Sisal IDPs and Milimani Self Help Group.
The deal with James Finlay has seen LOLC take over the former’s tea plantation which covers an area of 10,300 hectares including 5,200 hectares of tea fields over nine tea estates.
The UK multinational will retain its tea extraction business which will be supplied by LOLC’s local operations that will be rebranded from James Finlay Kenya to Browns Plantations Kenya to reflect the change in ownership.
“Finlays has affirmed its ongoing commitment to Kenya, retaining ownership of the Saosa tea extraction facility, to be rebranded as Finlays Extracts Kenya, which will continue to source leaf tea, timber and other services directly from James Finlay Kenya and James Finlay Mombasa, its tea sourcing and packing enterprise specializing in Kenyan tea,” DealMakers Africa said.
LOLC Holdings is a Sri Lankan conglomerate operating in trading, manufacturing, leisure, agriculture and insurance. It has a presence in many countries including Indonesia, Cambodia, Egypt, Tanzania and Nigeria.
The conglomerate’s subsidiary Browns is one of the largest tea producing companies in Sri Lanka where it acquired James Finlay’s tea estate business in 2021.
