Mauritian firm to buy 30% stake in Naivas Supermarket

The transactional value is estimated to be way above Sh6 billion

In Summary
  • IBL Group has been in existence since 1860
  • Naivas has 84 outlets spread across 20 towns in Kenya
The new Naivas Supermarket branch along Kisumu-Kakamega road in Kisumu city
EXPANSION: The new Naivas Supermarket branch along Kisumu-Kakamega road in Kisumu city

A Mauritian conglomerate IBL Group has borough a 30 per cent stake in Naivas Supermarket, pushing up the influence of Southern Island investors in Kenya’s retail sector.

The Private Equity firm is taking over the stake held by World Bank’s International Finance Corporation (IFC) and French private fund.

Although the retail chain did not disclose transactional value details of the deal, the previous shareholders bought the stake at Sh6 billion two years ago.

The statement revealed that it was the biggest investment IBL has ever made in the past two centuries. The investment firm has been in existence since 1860. IBL has also assembled a group of institutional investors to buy out the IFC consortium.

“I want to take this opportunity to introduce the IBL Group whom we are in advanced discussion, pending regulatory approval to join Naivas International as shareholders,’’ the firm managing director David Kimani said in a statement on Friday.

He added that the new development would not have any operational challenge to the retail chain.

According to Naivas, the deal will not include fresh capital injection into the retailer pumped in the retailer.

The family of the late businessman Peter Mukuha Kago, who founded the business, will remain with a controlling stake in the supermarket.

According to IBL, the proposed transaction will give it a platform for further investments in East Africa, noting that Naivas has scaled up its operations substantially to entrench its position as the biggest supermarket operator in the country.

“This family business created in 1990 is an example of a success story that has continued to grow despite the pandemic thanks to its strong business model,” Arnaud Lagesse, IBL’s chief executive, said in a statement.

Naivas has 84 outlets spread across 20 towns in Kenya and has modern grocery retail. Naivas also contributes to the Kenyan economy, notably by employing over 8,000 people.

The retailer is set to close the financial year ending this month with a gross turnover of Sh102 billion with an ambition of raising it to $1 billion in the next financial year.

It is currently the market leader in terms of branches, taking over from Tuskys Supermarket has substantially cut its footprint on poor financial health. 

Naivas is followed by Quickmart Supermarket which is spreading rapidly. It had 58 branches as of the end of last month. 

In 2019, Adenia Partners, a Mauritius-based private equity firm operating in sub-Saharan Africa acquired Quick Mart, merging it with Tumaini Supermarket which it acquired the previous year.

It pumped  €230 million (Sh29.4 billion) into the retail chain.