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DANGOTE TO ENTER KENYA’S MARKET THROUGH JAVA HOUSE DEAL

DANGOTE TO ENTER KENYA’S MARKET THROUGH JAVA HOUSE DEAL
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Faith Nyasuguta

Africa’s wealthiest businessman, Aliko Dangote, is making significant strides in Kenya’s food and beverage industry. His private equity firm, Alterra Capital, is in the process of acquiring a majority stake in Java House, a leading East African restaurant chain, from UK-based investment firm Actis. This acquisition also involves Phatisa Group, another private equity fund, and is currently undergoing regulatory approval.

Java House, which began as a single coffee shop in Nairobi in 1999, has grown into a regional brand with 73 outlets across Kenya, Uganda, and Rwanda. The acquisition includes Java House and several subsidiary brands, such as Planet Yogurt, Three Sixty Degrees Pizza, Kukito Africa, and Foodscape Africa, a centralized commercial kitchen producing baked goods, coffee, and cooked food.

This deal marks the fourth ownership change for Java House since 2012. The previous ownership included Emerging Capital Partners, Dubai-based Abraaj Group, and most recently, Actis, which acquired Java House in 2019 following Abraaj’s liquidation.

/Trip Advisor/

Alterra Capital, founded in 2022, focuses on investments in sectors including food and beverages, hospitality, retail, telecommunications, technology, financial services, consumer products, infrastructure, and logistics. Phatisa Group, established in 2005, emphasizes investments across the food value chain in countries such as Kenya, the Democratic Republic of Congo, Malawi, Mauritius, Seychelles, and Zambia.

The acquisition is under review by the Comesa Competition Authority (CCA), which will assess its potential impact on competition and public interest. Competitors, suppliers, and customers have been encouraged to submit written feedback regarding the acquisition before final approval.

Dangote’s entry into Kenya’s market through Alterra Capital’s investment is seen as a strategic move to expand his influence in the East African region. With this acquisition, Dangote aims to capitalize on the growing demand for food and beverage services in the region, driven by a rising middle class and increasing urbanization.

Java House’s extensive network and established brand presence make it an attractive investment opportunity for Alterra Capital and Phatisa. The deal is expected to bring in fresh capital and expertise to further expand Java House’s reach and improve its operational efficiency.

/Java/

This acquisition could potentially lead to job creation and increased economic activity within the region. However, it also raises concerns about market consolidation and the potential impact on smaller, local businesses. The CCA’s review will be crucial in determining the future of this significant transaction.

By acquiring Java House, Dangote strengthens his position as a key player in Africa’s food and beverage industry. The success of this deal could pave the way for further investments and collaborations between Kenyan businesses and other African and global investors.

Aliko Dangote /Dangote Group/

This strategic expansion into Kenya aligns with Dangote’s broader vision of becoming a dominant force in various sectors across the continent. 

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Faith Nyasuguta

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