Kuehne+Nagel buys rival for Sh8 billion

Logistics firm Kuehne+Nagel (Kenya) Limited is set to acquire rival Morgan Air and Sea Freight Logistics Kenya Limited. PHOTO | SHUTTERSTOCK

Logistics firm Kuehne+Nagel (Kenya) Limited is set to acquire rival Morgan Air and Sea Freight Logistics Kenya Limited for an estimated Sh8 billion, marking one of the largest transactions in the industry.

The Competition Authority of Kenya (CAK) has approved the deal on the basis that it will not have a negative impact on competition.

The regulator did not disclose the value of the transaction but sources familiar with the matter told Business Daily the buyout sum is Sh8 billion.

Also read: Strategic alliances as a way of partnership

“This approval has been granted on the two key considerations during merger analysis that, first, the transaction is unlikely to negatively impact competition in the market and it will not elicit negative public concern,” said the CAK.

The regulator said the combined market share of the two companies is 21.99 percent against 78.01 percent held by other competitors.

Kuehne+Nagel tops in market share at 19.1 percent followed by Panalpina Airflo at 17.2 percent while Morgan Air’s market size is 2.89 percent.

Data from the competition watchdog shows there are more than 1,500 freight sea and air freight forwarders registered with the Kenya International Freight and Warehousing Association.

Its parent firm is based in Switzerland and has operations in other countries besides Kenya.

The multinational deals in sea freight forwarding, air freight shipping and road transport and has been expanding its global logistics business.

“In June 2023, Kuehne+Nagel signed an agreement to acquire Morgan Cargo, a leading Air Logistics provider in South Africa, the UK and Kenya. The company specialises in perishables, employs 450 logistics experts and handled 40,000 tonnes of air freight and 20,000 TEU in 2022,” read a statement from Kuehne+Nagel.

The firm also acquired Trillvane Limited Kenya which specialised in the export of flowers and vegetables.

“The acquisition of Morgan Cargo ideally complements Kuehne+Nagel’s perishables logistics service offering, while improving connectivity for customers to and from South Africa, the UK and Kenya, which includes state-of-the-art cold chain facilities,” read an earlier press release dated June 6 from Kuehne.

South African-based Morgan Cargo operates in more than 16 countries, including Spain, the United Kingdom and Kenya offering logistic solutions for perishable and general cargo.

The company ships, among others, pharmaceutical products, automotive, and live animals.

The logistics industry has lately been shaken up by the mergers and acquisitions of Kenyan firms by global transport providers in a bid to expand their footprint in the region.

In March, Mauritian conglomerate Rogers Group acquired Rongai Workshop & Transport Limited through one of its subsidiaries Velogic Logistics as part of its regional expansion strategy.

Also read: How partnerships and tech can boost insurance uptake

The buyout of the trucking company was implemented through General Cargo Services Limited, a subsidiary of Velogic Logistics, which is in turn owned by Rogers.

→[email protected]