Revealed: Kirubi earned Sh700m from Bic deal
Haco Industries held the exclusive franchise for BiC products in the region for about four decades. “Haco Industries acquisition (6.3 million euros/Sh714 million),” BIC — the company — revealed in its results update for the year ended December.
“On 31 December 2018, BIC announced the transfer of Haco Industries Kenya Ltd manufacturing facilities in Kenya and distribution of stationery, lighters and shavers in East Africa to BIC. This acquisition is in line with BIC’s continued growth strategy in Africa, one of the most promising markets for BIC products in the world.”
The sale marked the latest reorganisation in Mr Kirubi’s portfolio of private companies. In December 2017, the billionaire took back full control of Haco after acquiring Johannesburg-based Tiger Brands’ then 51 percent stake in the fast-moving consumer goods manufacturer for an undisclosed sum.
Mr Kirubi had in 2008 sold his shareholding in the firm to the multinational for more than Sh300 million. Haco is among several private companies owned by Mr Kirubi, who also holds a 45 percent stake in agrochemical firm Bayer East Africa.
BIC has in the past said the transaction was in line with its continued growth strategy in Africa, with the multinational attracted by a positive outlook for the stationery market.
Besides Bayer East Africa, Mr Kirubi also has interests in the local franchise of global logistics company, DHL. The businessman also holds a controlling (30 percent) stake in the publicly-traded Centum Investment, currently valued at Sh6.5 billion as per the Nairobi Securities Exchange (NSE) market capitalisation.
However, Centum’s latest reported book value marks the businessman’s stake in the firm at Sh15.4 billion. Mr Kirubi, who spent more than Sh1 billion to raise his shareholding in Centum from 24.9 percent in 2013 to 30 percent in 2015, sees the NSE-listed firm as his preferred investment vehicle.
He has raised Centum’s shareholding in various companies, including Almasi Beverages and Longhorn Publishers. As a long-established and publicly traded firm, Centum finds it relatively easier to raise new equity and debt capital compared to a private company.
Mr Kirubi’s deal with BIC means that Haco is now left to trade in the home care and hair care line of businesses whose brands include Sosoft fabric softener and Miadi shampoo.
Haco had been manufacturing and distributing the BIC brand of products for the Kenyan market and neighbouring countries. After buying out Mr Kirubi, the French multinational said it would review the staffing levels at the unit upon assuming control, adding that it will align the business with its global operations. It was not immediately clear how many employees would be affected by such a review.
BIC has set for itself several targets to be achieved by 2022, including annual savings of €20 million (Sh2.2 billion) and reaching 10 percent of net sales from e-commerce. The multinational acquired Haco’s semi-automated production plant in Kasarani as part of the transaction.
The Kenyan firm said this would give it an opportunity to diversify and grow in the regional markets. The sale added to the emerging trend in the retail and fast moving consumer goods sector, where multinationals have squeezed out local franchises by buying them out or entering into joint ventures.