Mauritian conglomerate IBL Group, owner of the Winners supermarket chain, is set to take control of Naivas in Kenya. The Mukuha family, who founded Naivas, are reportedly selling an additional 11% share in the company for $41.7m. The deal will value Naivas at around $379m.
As a result of the sale, the Mukuha family’s share of Naivas will drop to 49%. IBL, through its local investment vehicle Mambo Retail, will subsequently own a majority shareholding of 51%.
The acquisition is a sign of confidence from IBL in Naivas’ growth and profitability. Naivas is the largest supermarket chain in Kenya and has embarked on several years of aggressive growth and store openings as rivals Nakumatt, Uchumi and Tuskys have collapsed.
Perhaps what is even more impressive is that it has done so during a period of intense pressure in Kenya on the cost of living, including a sustained period in 2022/2023 of fx shortages. These fx shortages hit imported brands and premium retailers especially hard.
The big question is what IBL wants to do with Naivas. Unlike Tuskys, Nakumatt and Uchumi, Naivas has never opened stores outside Kenya. Current rival Carrefour (Majid Al Futtaim) is also the largest supermarket chain in Uganda. That is one option, and could potentially marry with IBL’s broader business goal of expansion across East Africa.
But there is also a significant opportunity to expand in Kenya – with new store formats (such as smaller stores, forecourt stores, discounters) and into the long tail of provincial towns and cities where smaller competitors still have a foothold. This is the safer option but it carries the risk of Naivas being dependent on one market only.
There is also the question about how (or if) IBL wants to create synergies between its FMCG distributor BrandActiv, which is moving into East Africa, and Naivas. One thing is clear: IBL has the capacity to shake up FMCG brand distribution in a major way in Kenya. This comes at a time when distributors are still facing challenges: debts from Tuskys, Nakumatt and Uchumi; a cash flow squeeze; an uncertain picture of consumer demand.
