Brookside Dairy plans to buy majority shares in a Rwandan food processing firm owned by President Paul Kagameâ€™s party.
Inyange, Rwandaâ€™s leading food processing company, is in talks with the Kenyan dairy firmâ€”which is owned by President Uhuru Kenyattaâ€™s family, to sell a 51 per cent controlling stake in a bid to expand its operations to East African region.
Crystal Ventures Ltd, an investment arm of ruling party Rwanda Patriotic Front that owns Inyange, confirmed the talks between the two companies although details on the deal remain scanty.
The deal underlines the acquisition appetite of Brooksideâ€”which recently completed the Sh1.1 billion acquisition of rival Buzeki Dairy, the maker of Molo Milk brand and its quest for a 20 per cent stake in Ethiopiaâ€™s milk processor, Elemtu Dairy.
â€œTalks between the two companies are ongoing although right now the information is still confidential,â€ said Mr Jack Kayonga, the chairman of Crystal Venturesâ€™ board of directors.
Inyange, with current investment of up to $70 million, will lose the decision-making role should it retain 49 per cent.
The firm produces milk, water and juice, and it hopes to take this advantage to the region since it is one of the few companiesÂ in East Africa that manufactures the three products at one go.
The takeover is expected to build the companyâ€™s capacity in terms of expertise and financial resources in its quest to expand in the region.
Crystal Ventures would raise over $120 million (Sh1 billion) when the deal with Brookside is concluded.
The deal will be in line with Brooksideâ€™s expansion strategy that mainly hinges on buyouts which help it avoid fights with rivals in the race for market share gains.
Buzeki was Brooksideâ€™s latest takeover of a rival firm in a series that has seen it take control of Ilara, Delamere and SpinKnit (makers of Tuzo milk brand).
The acquisitions pushed Brooksideâ€™s share of the processed milk market to 44 per cent, cementing its position as Kenyaâ€™s largest dairy firm.
If successful, Elemtu Dairy will offer Brookside lessons as it seeks to enter Nigeriaâ€”Africaâ€™s most populous country.
Brookside has presence in Uganda, Tanzania and Kenya.
Mr Kenyattaâ€™s assumption of the presidency has injected fresh energy into his familyâ€™s commercial empire, putting a number of its units on an expansion mode that is expected to consolidate its position as one of the largest business dynasties in Kenya.
The business empire that is associated with Kenyaâ€™s founding president Mzee Jomo Kenyatta has in recent months made fresh bets in the hospitality, dairy, media and banking sectors.
Besides Brookside, high-end Heritage Hotels, Commercial Bank of Africa (CBA) and Mediamax Group, which owns K24 TV, Kameme Radio andÂ The PeopleÂ newspaper, top the list of Kenyattaâ€™s business empire that are revamping their operations.
The story first ran in Rwanda Today.