CAK Approves Bigot Flowers, KEL Chemicals for Acquisition

The acquisition of Bigot Flowers Kenya by Flamingo Horticulture Investments Limited has been authorized by the Competition Authority of Kenya (CAK).

A public unlisted limited liability business with its headquarters in Naivasha, Bigot Flowers engages in the production, marketing, and distribution of rose flowers.

On the other hand, Flamingo Horticulture is an investment holding company incorporated and authorized in England and Wales.

It has control over a number of businesses in Kenya that are engaged in the production, marketing, and distribution of cut flowers, including roses.

“This approval has been granted based on the finding that the transaction is unlikely to negatively impact competition in the market for growing, processing, and exporting flowers, nor elicit negative public interest concerns, the two key considerations during merger analysis,” said CAK in a statement.

After the merger, the company will have a 9.8% market share in the market for flowers grown for export, but it will still be under competition from businesses in the same industry that holds over 90% of the market share as well as foreign exporters of flowers.

The proposed acquisition is not expected to significantly diminish competition in the market for flower production, processing, and export in Kenya, according to CAK.

The 1,000 employees of Bigot Flowers will continue to work there under the same conditions following the takeover.

With a 38% market share, Kenya is the top exporter of cut rose flowers to the European Union (EU). Dutch auctions account for about 50% of flower export sales, however, direct sales are on the rise.

The primary retailers in the United Kingdom are supermarkets. Kenyan flowers are exported to more than 60 countries.

AA Growers, Afriflora, Aquila Flowers, Blacktulip, Flamingo Flowers, Herbug Roses, Hola Roses, Isinya Roses, Panda Flowers, and Batian Flowers are a few of the major flower growers and exporters in Kenya.

As of 2021, agriculture accounted for roughly 20% of Kenya’s GDP, making it the country’s largest economic sector.

The value of horticultural exports in 2021, including cut flowers, was Sh157.7 billion, according to the Economic Survey 2022. Cut flower sales were worth Sh110.8 billion in the year under review.

At the same time, CAK has given the go-ahead for Jeetendra Kumar Somchand, Mahendra Kumar Somchand Haria, Pankaj Somchand Haria, Pradip Somchand Haria, and Deveshkumar Bhupendrabhai Patel to fully acquire KEL Chemicals Limited.

The buyers are Kenyan nationals who work locally as building and civil engineering contractors, wholesalers of general commodities, and manufacturers of paper goods and plastic containers.

KEL Chemicals is a Kenyan limited liability business that produces industrial chemicals based on sulfuric acid as well as phosphate fertilizers and water treatment products.

Its market share among Kenya’s fertilizer producers is 0.4%.

“Post-merger, there will be no change in the market structure and concentration of fertilizer manufacturers since the parties’ activities do not overlap,” said CAK.