Coca-Cola bottling factories based in Nyeri, Rift Valley and Kisii in Kenya have completed their merger, in a deal that should see the value of the three rise by 26 percent.

The three bottlers are now beginning the search for a new executive and directors following the merger, which was originally confirmed in August.

Seven years after the last consolidation of bottlers, into the Embakasi-based Nairobi Bottlers Ltd (NBL), the three bottlers have formed Almasi Beverages Limited, which is expected to command a value of 5.7 billion Kenyan Shillings ($65.9 million). The completion of the merger now paves the way for a new board to be announced.

The new single entity is expected to save operation costs and produce a larger market share in the soft drinks market. New products are also likely to hit the shelves. Almasi will become the second largest firm in terms of market share with 29 per cent.

Investment firm Centum has emerged as the main beneficiary, according to Business Daily, with the firm having had sizeable stakes in the bottlers previously. Its 40 per cent stake in the new single entity will give the company clout in decisions on directors and executives.

“Centum’s stake in Almasi is just under 40 percent,” said director Robert Bunyi. Officials said no plants would be closed as a result of the merger, with concerns having arisen from the Nairobi Bottlers experience, when three factories were shut down and jobs lost.

Shareholders, who have been issued with new shares, did put up some resistance to the merger. Matu Wamae, a businessman and shareholder in the Mount Kenya factory, claiming the deal was spearheaded by Centum alongside the Industrial and Commercial Development Corporation, which also has stakes in the companies.

Centum is in the process of tightening its grip on Coca-Cola franchises, buying an additional 442 million Kenyan Shillings ($5 million) in shares in Nairobi Bottlers between April and September last year, taking its stake up to 27.62 percent. The company’s shares in the four bottling companies represented 28 per cent of its assets, as well as 20 percent of profit and two per cent of cash flow.

The firm is, however, tied up in a court case involving the three bottling firms and Nairobi Bottlers. The Kenya Revenue Authority is demanding they pay 5.6 billion Kenyan Shillings ($64.8 million)  in taxes following their ignoring a tax law review. Centum has warned that should their petition fail at the Court of Appeal their earnings would be hurt.

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