Global shipping line MSC Group has sought regulatory approvals for its acquisition of Bolloré Group’s business in Africa, a transaction that is expected to tighten MSC’s grip of Kenya’s shipping and logistics industry.
The two companies have filed an application with the Comesa Competition Commission (CCC) seeking approval for the acquisition of Bolloré Africa Logistics (BAL) by MSC Group from its parent company Bolloré Group.
The firms had in April signed an agreement that would see MSC acquire BAL for Sh725 billion (€5.7 billion) from the French giant through its wholly owned subsidiary SAS Shipping Agencies Services Sàrl (SAS Lux).
Acquiring BAL, which is among the major players in Kenya’s logistics sector, would see MSC emerge as an even bigger player in the local industry. BAL’s offerings in Kenya include services in supply chain, warehousing and long-haul freight.
MSC Group is also an equally big player in Kenya’s shipping and logistics. In addition to its container liner shipping, sea freight forwarding business and inland container transportation, MSC Group has recently gotten a deal to run the second container terminal at the Port of Mombasa.
“The proposed transaction involves the acquisition by SAS Lux, a wholly owned subsidiary of MSC, of 100 per cent of BAL from Bolloré SE,” said the Comesa competition watchdog in a statement dated August 9 inviting stakeholders to submit their views on the transaction by August 30.
“In the Common Market, MSC Group provides container liner shipping services, sea freight forwarding services and inland transportation services, and recently obtained approval to acquire joint control of one container terminal in Mombasa from the CCC.”
In the deal that will see the Swiss shipping liner take over operations at the second container terminal at the Mombasa Port, MSC Group through SAS will increase its shareholding in the Kenya National Shipping Line (KNSL) to 47 per cent while KPA will have a stake of 53 per cent.
KNSL is in turn expected to become the new operator of the second container terminal, where it will offer freight forwarding and container liner shipping services.
MSC – through SAS – will have joint control of KNSL with the Kenya Ports Authority (KPA).
The second container terminal comprises of three berths (20 to 22). In the first phase of the upgrade, two of the berths were completed in 2016 and are currently operated by KPA.
The has just been completed and was constructed at a cost of Sh32 billion and financed by the Japan International Cooperation Agency (Jica). Construction works are being undertaken by Japanese Toyo Construction Company.
“The parties have submitted that the activities and geographic footprint of the MSC Group and BAL are mainly of a complementary nature. In this regard, the MSC Group believes that the proposed transaction will create synergies between its activities and BAL’s activities throughout Africa,” said the CCC.