Treasury approved the deal in a notice in Friday’s Kenya Gazette after the European Commission agreed to Unilever’s acquisition of Sara Lee Corp’s body care and detergents businesses for $1.3 billion (Sh104 billion).
In Kenya, Unilever will gain access to Sara Lee’s beauty products such as Hair-Glo, Cleartone and Miss, which are manufactured in the country, and import other products like deodorants, skin cleaners and fabric care goods previously owned by Sara Lee’s global operations.
The firm hopes this will broaden its product line-up that is critical in grabbing market share from rivals such as Haco Limited and Interconsumer products.
“The government’s approval now grants us control of Sara Lee Kenya’s bodycare businesses,” said Yaw Nsarkoh the managing director of Unilever Kenya.
“Home and personal care is a key growth category and the acquisition will fill gaps in our portfolio, while offering significant potential for development.”
On its part, Sara Lee says the divestiture of its body care businesses will enable it to concentrate on areas where it has a strong competitive position like polishes, cleaners and wax under the Kiwi brand â€” a Kenyan household name â€” and insecticides under the Ridsect brand.
“The acquired stake forms only about 10 per cent of our products. The onus whether to continue manufacturing the products locally as we have done or not lies with Unilever and we don’t anticipate any job losses in the transition,” said Amir Kassim, Sara Lee Kenya acting managing director.
Sara Lee’s other international personal care brands include Radox, Neutral, Biotex, Zwitsal, Fissan, Prodent among others.
Sara Lee has sold off a number of brands over the last five years as part of a strategic shift at the global front. Unilever is seeking to reclaim its position in a Kenyan market it dominated for nearly three decades until the mid 1990s.
More recently, Unilever Kenya’s dominance of the home care and beauty products segment of the fast moving consumer goods market has come under a severe attack from homegrown rivals such as Bidco Oil Refineries, Interconsumer and Haco Industries.
Tiger Brands of South Africa acquired a significant presence in Haco Industries three years ago giving the Kenyan firm the muscle to challenge Unilever’s stranglehold on the market.
Haco Industries beauty care products â€”Palmers Cocoa Butter formula and Palmers Olive Butter formula â€” are in direct competition with Unilever’s Lady Gay lotion and Fair and Lovely cream.
Procter & Gamble, another foreign firm with deep local roots, has also extended its battle for control of the global consumer goods market with Unilever into Kenya.
Unilever is betting on its expanded marketing spend and new and re-branded products to gain and defend its market share.
It has shifted its executive suite with the replacement of Mr David Mureithi, who moved to Ghana, with Mr Nsarkoh as the CEO in pursuit of fresh ideas to rev up its fortunes.
Critics say Unilever has been an enemy of its own success, citing its near lack of interest in changes in its business environment, even as its rivals rocked the market with new or re-branded products.
The fight for the consumer goods market has ensued at a time when disposable income is on the up in Kenyan households, helped by the ongoing economic recovery, which has created new demand that firms are looking to capture.