Naivas founders aim for Sh5.8 billion as foreigners take over

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The family of Peter Mukuha Kago, the founder of Naivas, plans to sell an additional 11% stake in the company for an estimated $41.7 million (Sh5.8 billion). The deal would see foreign investors gain controlling ownership of Kenya’s largest supermarket chain. This would be the third time the Mukuha family has sold shares in Naivas. The Mauritian conglomerate IBL Group, part of a consortium that bought a 40% stake in Naivas last year, disclosed the proposed deal. The transaction would reduce the Mukuha family’s interest in the supermarket chain from 60% to 49%, making them minority shareholders.

The Mukuhas have been offloading their shares in recent years, in contrast to the founders of other retail giants such as Nakumatt Holdings and Tuskys, who held onto their stakes until the collapse of those ventures. In 2020, the Mukuhas sold a 31.5% stake to a consortium comprising the International Finance Corporation (IFC), DEG, and private equity firms Amethis and MCB Equity Fund. The family’s ownership in Naivas fell to 68.5%, but became more valuable as the supermarket chain expanded profitably.

The IBL-led group, including DEG and Proparco, reached a deal last year to buy the IFC’s stake and acquired an additional 8.5% stake from the Mukuhas. The Mukuha family stands to receive at least Sh5.8 billion from the latest deal. Naivas is valued at $379.9 million, making it one of the most valuable privately held companies in Kenya. The retailer reported sales of Sh65.1 billion in the year ended June 2021, with a net profit of Sh2 billion.

This latest development highlights foreign investors’ increasing control over Kenya’s major supermarkets, as Naivas joins the list of chains now under foreign ownership. Naivas has experienced profitable growth and market share expansion, distinguishing it from its bankrupt rivals, such as Nakumatt Holdings, Uchumi Supermarkets, and Tuskys.

BDA

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