Containers maker Metal Cans takes over assets of rival Nampak Kenya

Fabricated metal containers manufacturer Metal Cans & Closures Kenya is set to acquire the assets of rival Nampak Kenya following approval of the deal by the competition watchdog.

The deal which has received unconditional approval from the Competition Authority of Kenya (CAK) will see Metal Cans acquire part of the assets of Nampak Kenya including plant and machinery, properties and inventory.

“The undertakings indicated that the rationale of the proposed transaction is enabling Metal Cans & Closures Kenya to expand its business by venturing into production of food cans, crown caps, and shoe polish containers. Further, it will acquire more assets since the target is closing down,” CAK said in a statement on Monday.

Metal Cans is involved in the manufacture of fabricated metal containers for paint, chemicals, seeds, and coffee.

Nampak Kenya which is set to close shop is meanwhile ultimately controlled by Nampak, a South African domiciled firm that is listed on the Johannesburg Stock Exchange (JSE).

The companies were obligated to disclose the transaction to the competition watchdog as their combined turnover/assets surpass Sh1 billion --meeting the threshold for mandatory notification and full analysis.

CAK deemed that the transaction would not lessen or prevent competition in the market for metal packaging materials in Kenya.

“This transaction will not elicit negative public interest issues since the proposed transaction is intended to salvage the target’s viable assets which would otherwise exit the market. The parties have indicated that the proposed transaction will have no effect on employment as it entails the acquisition of the target’s assets without alteration to management,” the CAK stated.

The Kenyan packaging market was valued at Sh80.3 billion ($585 million) in 2023 where Metal Cans had a market share of 2.6 percent while Nampak’s was 1.4 percent.

The combined market-share of the merged entity is expected to be four percent, implying it will face competition from the remaining 96 percent of the market.

Platinum Packaging is the largest player in the segment, controlling a share of seven percent in a market dominated by family-owned enterprises.

Other major players include Friendship Container Manufacturer, and Packaging Industries.

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