Online Reporter
Nelson Gahadza
Mega Market (Private) Limited, owned by Shiraan Ahmed, has moved to acquire 100 percent of Lobels Holdings (Private) Limited in a proposed transaction that could see one of the largest bakeries in Zimbabwe come under a diversified fast-moving consumer goods (FMCG) group.
If approved, the deal would see Mega Market, a diversified FMCG manufacturer and distributor that also owns Mega Market Milling (Private) Limited, add one of Zimbabwe’s most recognisable bread producers to its portfolio.
The acquisition would strengthen the company’s presence across the food value chain, spanning wheat milling, bread production and distribution.
The proposed transaction is, however, subject to regulatory approval.
The Competition and Tariff Commission (CTC) has launched an investigation into the acquisition under Section 28 of the Competition Act to determine whether the merger is likely to substantially lessen competition, create a monopoly or otherwise be contrary to the public interest.
In a General Notice, the Commission said it will assess the operations of Mega Market and Lobels in their respective markets and evaluate the potential impact of the proposed acquisition on the structure and competitiveness of Zimbabwe’s milling and bakery industries.
The Commission is also inviting representations from stakeholders before making a final determination.
“The Commission wants to determine whether the proposed merger is likely to substantially lessen the degree of competition in Zimbabwe or any substantial part of it, or is likely to result in the creation of a monopoly situation which is or will be contrary to public interest,” the notice said.
Interested parties have until 31 July to submit written representations on the proposed transaction.
For Lobels, the proposed takeover marks another milestone in the company’s remarkable recovery after years of financial distress.
The bakery has steadily rebuilt its operations over the past decade following investment by a consortium of local banks and, later, private equity firm Takura Capital, which acquired the business in 2015 after assuming approximately US$18 million in debt.
Its turnaround gathered momentum in 2014 with the commissioning of a new production line at its Harare bakery, which increased daily bread output by 42 percent to about 340,000 loaves and helped the company regain market share in an increasingly competitive industry.
The proposed acquisition also comes as Mega Market continues to expand its investment footprint beyond its core FMCG operations.
Although privately held and not listed on the Zimbabwe Stock Exchange (ZSE), the company has built significant strategic shareholdings in several listed firms.
Together with its associate Zimbabwean Brands, Mega Market holds sizeable stakes in Dairibord Holdings and Meikles Limited, Tanganda among others.
The company has also previously invested in counters such as Mashonaland Holdings, Fidelity Life and Seed Co, reflecting a broader strategy of acquiring strategic positions across key sectors of the economy.
The transaction has also emerged against the backdrop of market speculation surrounding Mega Market’s investment activities.
Earlier this month, Dairibord Holdings issued a cautionary statement advising shareholders that three major investors – Equivest Asset Management, Mega Market and Mutare Mart & Exchange – were negotiating the disposal of their combined shareholding of more than 51 percent in the company to an unnamed third party.
Analysts believe that if the acquisition receives regulatory clearance, it would create a more vertically integrated food business, combining Mega Market’s milling and FMCG operations with Lobels’ established bread manufacturing and distribution network, further consolidating its footprint across Zimbabwe’s food production value chain.
