Business mogul Chris Kirubi has bought back a 51% percent stake in Haco industries. This leaves Chris Kirubi as the sole shareholder of the company after an amicable split with the South African brand. The two had a disagreement over one of Tiger’s strategic decision that would see an introduction of some of its items to the Kenyan market. Tiger said it no longer supports Haco’s model of manufacturing and distributing various consumer goods under license, adding that it wants to focus on its own fast-moving consumer goods brands.
“In addition to products manufactured and marketed by Haco under its own brands, the majority of Haco’s business lies in the manufacture and distribution of products under licence, which is not aligned with our current operating model of owning leading FMCG brands,” Tiger said in a filing with the Johannesburg Stock Exchange (JSE).
Haco deals in products like Palmer’s Cocoa Butter, BIC ball pens, and washroom cleaner Jeyes Bloo all manufactured and sold under license by various multinationals the company has agreements with. According to Tiger Brands, it is this partnerships and agreements that have slowed uptake of Tiger’s brands that include Purity (baby food), Ingram’s (personal care) and Tastic (cereals) in East Africa. On the other hand, Haco believes that it is this model that has maintained its growth since its establishment in the early 1970s
The price Kirubi paid to regain total control of his company remains undisclosed. Tiger bought the 51% stake for about 363 million but sources indicate Kirubi is paying a premium to regain 100% shareholding.
“I like my business. I’m taking back my business, that’s all,” Kirubi said adding that regulatory approvals are underway to enable closure of the deal.
Tiger says its earnings and asset base will not be materially affected by the Haco divestiture, which is part of a plan to exit difficult markets. The company also sold its 51% stake in Ethiopia’s East African Tiger Brands Industries.
Conclusion of the deal is likely to cause a change in the company’s name, which Tiger had rebranded to Haco Tiger Brands to reflect the change of control. The buyout of Tiger at Haco will boost Mr. Kirubi’s portfolio of private companies, which includes Bayer East Africa and International House Limited.