French PE fund set to take stake in Kenyan supermarket chain

Kenyan newspaper Business Daily reports that Paris-based private-equity fund Amethis is to acquire a 30% stake in Kenyan supermarket chain Naivas. According to “sources familiar with the transaction,” “Talks are at an advanced stage, with the parties now awaiting regulatory approval before making a formal announcement.”
Naivas opened its 60^th store in December 2019 and acquired the last six branches of former market leader Nakumatt shortly afterwards. Chief commerical officer Willy Kimani has outlined a long-term strategy that will see Naivas open stores in every one of Kenya’s 47 counties. Amethis is no stranger to African retail: In September 2019, it exited Ivorian wholesale and retail chain CDCI, in which it had acquired a minority stake in 2014.
The Sagaci Research View: If this deal is completed, it can be assumed that the ownership dispute that has bedevilled Naivas for much of the past decade and thwarted previous attempts at outside investment has been resolved, as it is highly unlikely that Amethis would invest in the business otherwise. It would also represent a significant vote of confidence in Naivas’ corporate governance, which has occasionally been questionable.
More broadly, this deal will help Naivas to fund both new store openings and the modernisation of its existing store networking, putting it in a better position to leverage the economies of scale it enjoys in the local market vis-à-vis such rivals as Quickmart, Chandarana foodplus, Carrefour, and Shoprite.
Conversely, this investment will ratchet up the pressure on archrival Tuskys, which has long-running governance issues of its own and is currently seeking external investment prior to floating the business on the Nairobi Stock Exchange.
Until relatively recently, Anglophone and Francophone Africa had largely remained separate spheres in terms of retail investment, with even South African chain Shoprite (the biggest player in grocery retail in sub-Saharan Africa) largely avoiding French-speaking markets (opening stores in Nigeria and Ghana but not Côte d’Ivoire, for example).
However, with this investment by Amethis, the opening of six Carrefour outlets in Nairobi, and sporting-goods retailer Decathlon’s recently revealed plans to open a second outlet in the city, French investment in Anglophone markets (or at least in Kenya) is clearly on an upward curve.
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If you want to know more about Naivas’ operations, strategy, and expansion plans in Kenya, you may be interested in Sagaci’s Retailer Research Report for the company.