16 February 2019

Kenya: Rise and Rise of the Kenyatta Family Business Empire

Photo: Stephen Mudiari/Daily Nation
Former First lady mama Ngina Kenyatta with her son Muhoho and his wife.

Feuds and disagreements have torn apart many family businesses in Kenya. Many such collapses has been witnessed and reported in the recent past.

However, when it comes to the business empire that Kenya's founding president, Jomo Kenyatta, built, things have been moving from strength to strength as younger family members join the family business and help grow its territory.

POLITICAL POWER

President Uhuru Kenyatta's assumption of power in 2013 further served to oil the Kenyatta business juggernaut with most of the family ventures shifting into expansion mode.

With interests in real estate, hospitality, dairy farming, media and banking, the ventures are spreading their tentacles not just on the domestic front, but also exploring and exploiting markets beyond Kenya's borders, entrenching 'Kenyatta Inc.'s position as one of the biggest business dynasties in Kenya.

Those who know the family business well say the Kenyattas will are well placed to continue to grow their wealth on the basis of the political clout the family wields, strong business ties and the orderly manner in which the business is ran.

"They are not just an ordinary name in Kenya's history. Unlike those who were powerful at some point and later faded due to loss of political power, the Kenyatta family is still here; two presidents, two first ladies and many youthful entrants into the running of the businesses. You can't compare them to any other," a business analyst who asked for anonymity commented.

The banking wing of the business is all set to acquire a stake in tier two bank National Industrial Credit (NIC), when it merges with tier one lender Commercial Bank of Africa (CBA), of which the family holds a 24.92 stake. CBA will have about 13.2 per cent stake in the NIC business.

MERGERS & ACQUISITIONS

In the deal that will make the merged entity the third-largest bank in the country (with assets of Sh444.3 billion based on September 2018 disclosures), President Kenyatta, his brother Muhoho and former First Lady Mama Ngina Kenyatta will together directly hold stakes worth Sh8.5 billion.

Together with the Ndegwa family, billionaire businessman Naushad Merali and, a few other investors, the clique will control more than half of the bank set to dislodge Co-operative Bank from its number three position by assets.

Also in the CBA radar is the struggling Jamii Bora Bank, whose acquisition is still ongoing. The acquisition it is said will be a separate business as a private lender. A Sh1.4 billion cash offer has already been made to fully acquire the small bank.

But buyouts and consolidation within the first family business ranks are not just limited to banking. The family's signature milk processor Brookside Dairies Ltd, set up in 1993, has since become the market leader in milk processing and allied products in Kenya and the region. The strategy script has been the same: expansion, acquisitions and mergers with the rivals

Among the acquisitions which have at times raised eyebrows about the effects of having one player dominate a market, are the purchases of Ilara, Delamere, Molo Milk and Kilifi dairy brands.

Brookside has also expanded operations to Uganda and Rwanda, and there have been reports it was eyeing the Ethiopian market.

FAMILY IMAGE

The milk processor's expansion drive started just after the 2013 elections with the acquisition of the Sh1.1 billion rival Buzeki Dairy -- the maker of the popular Molo Milk brand and topped it up with the establishment of a 1,500-litre capacity milk cooling plant in Narok.

Ilara, Delamere and SpinKnit, the makers of Tuzo milk brand, had been similarly swallowed months before.

The price of milk has also been on the rise with the latest packet packaging done with 450 millilitres across the industry.

Apart from riding on the waves from the seat of power, the family has dedicated some of its members to the business.

One such a member is the publicity shy Muhoho Kenyatta. Mr Muhoho, who after graduating from the prestigious Williams College, Massachusetts in the US with a degree in economics and political science, joined the family businesses and has been pivotal for the growing empire.

He holds a vice-chair position in the board of CBA.

Analysts believe a stable steering hand anchored on former First Lady Mama Ngina Kenyatta has given the family business empire the needed cohesion and stability.

The presidency and their long stay on the national limelight has also ensured that feuds are minimal to keep the family image intact specially to tame anyone who my want to take political advantage of such feuds.

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