KENYA – Ustawi Grain Millers Limited (UGML), a subsidiary of Sarrai Group has acquired the assets of Mombasa-based Tahir Sheikh Said Grain Millers Limited (TSS) for an undisclosed amount.

Although the deal was not disclosed, Nation reports that the verdict was excluded from Section 42 (1) of the Competition Act, 2010 which touches on mergers and acquisitions.-

“In exercise of the powers conferred by Section 42(1) of the Competition Act, 2010, the Competition Authority of Kenya excludes the proposed purchase of all the assets of Tahir Sheikh Said Grain Milers limited (under receivership) (TSS) by Ustawi Grain Millers Limited (UGML) from the provisions of Part IV of the Act due to the following reasons,” Competition Authority of Kenya (CAK) acting Director General Adano Roba said in a statement.

CAK said that the takeover was okay as the transaction would not affect competition negatively adding that the transaction meets the threshold for exclusion provided under the Competition (General) Rules, 2019.

“(b) although the combined turnover of the parties for the preceding year, 2021, which is higher than assets, was above one billion shillings, the target had no turnover;” it added.

Sarrai Group is a conglomerate of diverse and inter-related agro-manufacturing companies across East and Southern Africa.

Established in Mombasa in 2020, UGML produces flour under the Umoja and Wando Brands. Umoja is Ustawi’s premium brand.

In an interview with Marcopolis earlier in the year, Kunal Patel, Head of Marketing at Comply Industries and Ustawi Grain Millers said that Ustawi Grain Millers was established with an aim to be a prominent player in the market as far as wheat flour and maize flour is concerned.

Having launched its first brand of all-purpose flour, that is home baking flour called Umoja, the company is looking towards launching maize flour to join other companies supplying the country’s staple.  

Patel revealed that the company is hoping to have two local maize flour brands, Wando, which will be a fiber brand, and the other will be Umoja, which will be the premier brand for maize.

However, Patel expressed fear over the ongoing distress in the price of commodities given that wheat is mainly imported from outside Kenya, from Russia, Canada, or Australia.

“If it increases, our cost increases, and at the same time the Kenyan shilling has depreciated so the import costs have become really high. That is one of the macroeconomic challenges we see,” he said.

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