The Competition Authority of Kenya (CAK) has approved Brenntag (Holding) B.V.’s acquisition of chemical distributor Desbro (Kenya) Limited. Brenntag (Holding) B.V. is a unit of Brenntag Group, a chemical distributor headquartered in Essen, Germany.
The Kenyan regulator’s approval was made on the condition that Brenntag continues to employ the 80 employees who currently work at the firm for a period of one year.
“Based on the foregoing, it is the authority’s view that the proposed transaction is unlikely to lead to a substantial lessening or prevention of competition in the market for distribution of industrial chemicals in Kenya,” the regulator said.
The Competition Authority of Kenya said the merged entity will have a market share of less than 5%.
Brenntag, a global market leader in chemical distribution, announced the agreement to acquire the Desbro Group in Kenya, Tanzania, Uganda, and the UAE in September 2018. The Desbro Group, which is headquartered in Nairobi, Kenya, is one of the largest and long-standing distributors in East Africa. It represents more than 50 world-class manufacturers of chemicals and offers a broad portfolio of commodities and specialty chemicals to diverse strategic customer industries in East Africa and the Middle East, including oil and gas, plastics, coatings & construction, textile, water treatment, and life sciences.
“With Desbro we are acquiring a leading and well-respected market player. The company provides us the needed market expertise, organization, and infrastructure to build on our strategy to claim outstanding Africa coverage. Combined with Brenntag’s know-how and existing product and supplier portfolio we will create an overall presence and offering in both Africa and the Middle East,” said Karsten Beckmann, member of the Board of Management of Brenntag Group and CEO of Brenntag Europe, Middle East and Africa (EMEA).
“East Africa is a sizeable market for chemical distribution to which Brenntag now gains access via this acquisition. We will now be in a position to extend the cooperation with our existing suppliers and attract additional suppliers in the region to support them in growing their customer base. In particular, we see a high potential to accelerate the growth of our Material Science business and to improve the market share in Life Sciences,” said Anthony Gerace, Brenntag Group’s managing director of Mergers & Acquisitions.
The acquired business generated sales of EUR 70 million (USD 81.4 million) in the 2017 financial year. Established in 1954, Desbro Group is privately owned and managed by Suman Sennik and his family. It is one of the largest and oldest distributors of chemicals and industrial raw materials in East Africa.