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World Bank Group Buys Ksh1.5B Stake in Naivas
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|World Bank Group Buys Ksh1.5B Stake in Naivas by Kenyans247(1): Wed 15, April, 2020 04:55pm|
The private lending arm of the World Bank Group, the International Finance Corporation (IFC), alongside other partners is set to acquire a minority stake worth $15 million (Ksh1.5 billion) in Kenyan supermarket chain Naivas.
The IFC is part of a consortium of investors involved in the deal; their partners being Private Equity (PE) fund Amethis, DEG and MCB Equity Fund, with the Mukuha family set to retain majority shareholding.
The Competition Authority of Kenya (CAK) approved the acquisition on March 2, and a statement published on Amethis' website later confirmed details of the deal expected to shake up Kenya's retail industry.
A Naivas supermarket branch in Westlands, Nairobi
A Naivas supermarket branch in Westlands, NairobiDAILY NATION
"Naivas aims at continuously improving its supply chain, developing its private label segment and strengthening relationships with suppliers. The group will then be able to consolidate its position and to further expand with new openings in the country.
"Amethis will be the first external investor outside the family to join the capital of the company," the statement reads in part.
Naivas was founded by the late Peter Mukuha Kago in 1990 as a small family-run business, Rongai Self Service Stores, in Rongai on the outskirts of Nakuru town,
With time, it grew and expanded to various towns and cities including Naivasha and Nairobi where its first branch was opened on Ronald Ngala street in 2001.
The Ksh1.5 billion investment is expected to drive the company's growth as it aims to become a leader in the country's retail market.
“We are very excited about this partnership. As we embark on our next phase of growth, having an experienced investor with us will further strengthen the business
“Amethis has a strong track record investing across Africa and in Kenya, which will add value to our operations,” Naivas Managing Director David Kimani is quoted on the Amethis website.
Jean-Sebastien Bergasse, a partner at Amethis, alluded to the influx of international investors into the Kenyan retail market in recent years.
Supermarkets such as Carrefour as well as other players such as Johannesburg Stock Exchange (JSE)-listed Shoprite have been scrambling to grow their market share in the wake of the demise of retail giants such as Nakumatt.
“In a Kenyan retail landscape where many competitors from abroad are settling in, we are proud to support a very successful Kenyan business that understands better the Kenyan consumer.
"We look forward to working jointly with the shareholders and management team to further expand the business’ operations and store network and keeping at the same time a strong Kenyan identity," Bergasse stated.
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