The proposed merger between Kisii Bottlers, Mount Kenya Bottlers and Rift Valley Bottlers may result in job losses, given that some functions, such as procurement, will have to be shared. Currently, each of these three companies has employed 120 workers on average. Hundreds of others also benefit from short-term contracting during peak seasons of manufacturing.
The three Coca-Cola Companies intend to venture into a merger that will form Almasi Beverages Limited. The merge will gather up a total shareholding value of KES 4.2billion, making it the second largest beverage company within the country, after Nairobi Bottlers Limited.
While this merger seeks to increase efficiency, some experts argue that it is likely to decrease the welfare of the consumer through monopoly power. Financial accounting expert and strategist, James Sumbi says that this merge will also directly impact on the shareholding of the respective companies. "A parallel merge will tend to bring the market performance of the company that's doing well down as it boosts the poorly performing one," he says. "You will also take note that when the share prices decrease, shareholder wealth decreases as well, and this turns off investors."
The exact date of the merger is yet to be announced.
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