Naivas owner to invest Sh9bn in regional buyouts

IBL Limited, a company holding an indirect stake of 37.32 percent in Naivas Limited, a supermarket chain, is planning to invest an additional $60 million (Sh9 billion) in new acquisitions within the East African region. This move comes as part of IBL’s strategy to diversify its investments beyond its home market in Mauritius.

Most of IBL’s recent investments have been concentrated in Kenya, where it has allocated over Sh20 billion to acquire the Naivas stake, as well as a majority share in the solar firm Equator Energy and the pharmaceutical distributor Harley’s. Harley’s operates across multiple countries in the region.

Since establishing an office in Nairobi in 2018 to spearhead its regional expansion, IBL has identified over 60 potential deals. Out of these, 12 transactions were prioritized, and nine received approval from its strategic committee. Among these approved deals, IBL successfully closed five, including the acquisition of the Naivas stake in collaboration with other institutional investors. Presently, three active deals are in progress, involving IBL’s subsidiaries.

“IBL Limited has invested $140 million in [the full year to June 2023] and has committed to a further $60 million in [the current financial year],” the multinational said of its regional investment plans in a trading update.  

IBL is strategically reducing its dependence on the Mauritian market from 90 percent to approximately 40 percent through substantial investments in the East African region. In Kenya, the company has made aggressive investments spanning less than two years, venturing into diverse sectors such as retail, insurance, energy, and pharmaceuticals.

Naivas Supermarket

This investment spree commenced with the acquisition of a 26.32 percent stake in Naivas in June 2022, involving a substantial investment of $100 million (Sh15 billion at current exchange rates). Subsequently, IBL entered the reinsurance market by establishing Ellgeo Seagon Re in September 2022, competing with major players like Kenya Re. Additionally, IBL acquired a majority stake in Equator Energy in March of the same year. Following this, the company acquired an additional 11 percent stake in Naivas in June, the exact sum of which remains undisclosed. Furthermore, IBL pursued the acquisition of Harley’s, a transaction that is anticipated to have concluded recently.

Also read Naivas opens 100th store

As a result of these strategic moves, IBL’s East African business now generates annual revenues exceeding $900 million (Sh135 billion). The choice to use Kenya as the launch pad for these regional investments underscores the country’s strategic significance. Many multinational corporations have cited several reasons for selecting Kenya as their investment destination, including its substantial economy, skilled workforce, and membership in the East African Community (EAC). The EAC, with a population of 283 million, provides a significant market for businesses. Moreover, Kenya serves as a pivotal regional communications and logistics hub, facilitating the seamless movement of people and goods via road, air, and sea.

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