Dubai is set to acquire the freight forwarding business and assets of a Kenyan logistics firm in a move that cements the country’s foray into the local shipping sector.
The United Arab Emirates (UAE), through its newly incorporated local entity ISS Global Forwarding Limited, is acquiring the freight forwarding division of Dodwell & Co. (East Africa) Limited.
The deal, which has been approved by the regulator, Competition Authority of Kenya (CAK), could see the UAE government step up competition in the local logistics sector dominated by players including Danish conglomerate Maersk and French firm Bolloré.
Dodwell & Co EA Ltd, based in Mombasa, is involved in maritime and freight forwarding services.
ISS Global Forwarding Limited is newly incorporated in Kenya and owned by Investment Corporate of Dubai (ICD), the Arab kingdom’s venture entity.
“The proposed transaction involves the acquisition of the freight forwarding business of the ISS Group and its subsidiaries Dodwell and ISS Kenya by ICD through ISS Global. ISS Global will acquire ISS Group’s assets including motor vehicles, fixtures and fittings, buildings and leaseholds, and employees of the target engaged in the freight forwarding business,” said CAK.
The Authority, through a notice, said it had issued the partners a greenlight to proceed with the deal since it had met the threshold for exclusion under the Mergers Threshold Guidelines. The regulator also said ISS Global has indicated its intention to acquire Dodwell’s highly specialised employees and, therefore, the proposed transaction was unlikely to lead to loss of employment.
The CAK said the transaction was unlikely to raise negative competition or public interest concerns. It noted that the merged entity is likely to face credible competition from the more established players like Siginon Freight, Freight Forwarders Kenya Limited and Kenfreight, as they have a higher capacity to efficiently handle more cargo compared to the merged entity.
The acquired clearing and forwarding firms handle consignment from across the world through the port, including motor vehicles, machines, containers, loose cargo and electricals.
Mombasa port is among Africa’s busiest with over one million twenty-foot equivalent units being cleared annually, attracting several local and international players looking to leverage on the lucrative logistics sector.
The story has been updated to clarify that only the freight forwarding business of Dodwell & Co. has been affected in the deal with ISS Kenya. Dodwell and Company East Africa and its associate Inchcape Shipping Services Kenya Limited have not been acquired.