Metal Cans & Closures Kenya Limited, a Kenyan based private limited liability company, has been given the green light by the Competition Authority of Kenya (CAK) to merge with Nampak Kenya Limited, a manufacturer of metal packaging materials.
The authority gave its unconditional approval for the proposed acquisition following a thorough analysis determined that the transaction is unlikely to negatively impact competition in the market for metal packaging materials or raise any public interest concerns.
The proposed transaction met the threshold for mandatory notification and full analysis, as a merger under the Competition Act Cap 501 of the Laws of Kenya, with the combined turnover or assets of the merging parties exceeding Sh1 billion. As the combined market share of Metal Cans & Closures Kenya and Nampak Kenya stands at 4%, post-merger, and still faces competition with a market share of 96%, the authority deemed the merger acceptable.
The merger will see Metal Cans & Closures Kenya, which specializes in the manufacture of fabricated metal containers for various industries, including paint, chemicals, seeds, and coffee, acquiring certain assets of Nampak Kenya, which is under Nampak Limited, a listed firm on the Johannesburg Stock Exchange, including plant and machinery, properties, and inventory.
The rationale behind this acquisition is to enable the former to expand its business operations by venturing into the production of food cans, crown caps, and shoe polish containers.
The competitors to the new entity will include Platinum Packaging – one of the major players in the Kenyan packaging market, holding a 7% share – Friendship Container Manufacturer, and Packaging Industries Limited. Additionally, there is considerable competition from alternative packaging materials such as plastics and international suppliers, which influence pricing and market share dynamics.
With the Kenyan packaging market having being valued at approximately Sh75.55 billion ($585 million) in 2023, a number of new players have entered into the industry.
As a result, the market is experiencing innovations in design, materials, and manufacturing processes, driven by increasing consumer demand for convenient and sustainable packaging solutions.
