South Africa's Media24 has increased its presence in Kenya's publishing industry with the takeover of East Africa Magazines, the publisher of True Love, Drum and Move! magazines.

The deal gives Media24 full control of the publishing firm that it has co-owned with the Nation Media Group (NMG) -- East Africa's largest media house. Media24 previously held a 49 per cent stake in EAM, leaving NMG with the controlling 51 per cent stake.

The partnership was founded in Nairobi in 2005 to publish the East African editions of True Love and Drum magazines that enjoy wide readership and circulation in the region.

Strategic move

Kobus Louwrens, the general manager of East Africa Magazines Limited, said the takeover is part of the strategic move by South African firm to establish a presence in East Africa.

"We see a long term future for our investments in east Africa" said Mr Louwrens.

Media24's takeover of EAM comes just two weeks after the publisher discontinued the publication of two titles -- Adam, a men's magazine and a travel and tour magazine Twende.

The titles were suspended as production costs escalated and advertising and circulation shrunk in what the company attributed to the global economic contraction.

A notice published in the Kenya Gazette indicates that Finance Minister Uhuru Kenyatta allowed Media24 to buy EAM on November 11.

"In exercise of the powers conferred by Section 31 of the Restrictive Trade Practices, Monopolies and Price Control Act, the Deputy Prime Minister and Minister for Finance hereby authorises the proposed acquisition of East Africa Magazines by Media 24 Limited," says Mr Kenyatta.

Media industry observers however said the move could see Media24 control Kenya's magazines industry where EAM will have three locally produced titles and distribute others from region.

Parliament is currently debating a new law -- the Competitions Bill -- that is expected change way mergers and acquisitions are executed in the country.

The law currently restricts foreign ownership of some businesses in Kenya.

It, for instance, requires foreign firms intending to purchase agricultural products from Kenya to have local share-holding.

The law also stipulates that investors in the telecommunications sector must reserve 30 per cent share-holding for Kenyans.

The law however does not prevent foreign companies from establishing a wholly owned publishing firm according to George Mbaye, a Nairobi lawyer.

South Africa seems to be keen on strengthening its presence in Kenya's publishing and distribution sector, especially after Jetsam -- one of South Africa's major distribution companies with branches in Botswana, Malawi, Swaziland and Zambia, took over the distribution of magazines published or imported by EAM.

Jetsam took over the EAM magazines distribution business from the Nation Media Group in what analysts say was the first signs that South Africa wanted a full control of the business.

But the firm has also closed its editorial offices in Cape Town and transferred minimal operations to Johannesburg.

Sources said Media24 is also planning to merge its Nigeria and Angola operations to be managed from Nairobi.

EAM started publishing in Kenya in 2005 with launch of flagship True Love title before Drum came onto the newsstands.

Kenya's magazine publishers have been swimming through a rough tide in recent months as inflation eats into consumer purchasing power.

Most locally produced magazines sell for between Sh120 and Sh200 in a country where a majority live on less than a dollar (Sh80) a day.

Acquisition of EAM marks Media24's proper entry into a market that has proved to be difficult for most South African companies.

South African Breweries closed its Kenyan subsidiary Castle Breweries in 2002 bringing to a close a four-year battle against East Africa Breweries.

Furniture stores Burnets and Supreme and fast food outlets Steers and Chicken Inn are among the prominent South African firms that have quit the Kenya market amid fierce competition.Media and entertainment firm, Numetro was the latest to follow suit.