Mega Market eyes Lobels takeover

Mega Market (Private) Limited, owned by businessman Shiraan Ahmed, has moved to acquire 100 percent of Lobels Holdings (Private) Limited in a proposed transaction that could bring one of Zimbabwe's largest bakeries under the control of a diversified fast-moving consumer goods (FMCG) group.

If approved, the acquisition would see Mega Market, which also owns Mega Market Milling (Private) Limited, add one of Zimbabwe's most established bread producers to its growing portfolio, significantly strengthening its presence across the food value chain from wheat milling to 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 would assess the operations of Mega Market and Lobels in their respective markets and evaluate the potential impact of the proposed merger on competition within Zimbabwe's milling and bakery industries.

"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.

The Commission has invited interested parties to submit written representations on the proposed transaction by 31 July before making a final determination.

For Lobels, the proposed takeover represents another milestone in its recovery after years of financial difficulties.

The bakery has gradually 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 accelerated in 2014 with the commissioning of a new production line at its Harare bakery, boosting daily bread production by 42 percent to approximately 340,000 loaves and helping the company regain market share in an increasingly competitive market.

The proposed acquisition also comes as Mega Market continues to broaden its investment footprint beyond its core FMCG operations.

Although privately owned and not listed on the Zimbabwe Stock Exchange (ZSE), the company has accumulated significant strategic investments in several listed companies.

Together with its associate, Zimbabwean Brands, Mega Market holds sizeable shareholdings in Dairibord Holdings, Meikles Limited and Tanganda Tea Company, among other investments.

The company has also previously invested in Mashonaland Holdings, Fidelity Life and Seed Co as part of a broader strategy to acquire strategic positions across key sectors of Zimbabwe's economy.

The transaction comes amid heightened market attention on 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 sale of their combined shareholding of more than 51 percent in the dairy company to an unnamed third party.

Industry analysts say that, if approved, the Lobels acquisition would create a more vertically integrated food business by combining Mega Market's milling and FMCG operations with Lobels' established bread manufacturing and nationwide distribution network.

Such a structure, analysts say, would further consolidate Mega Market's position across Zimbabwe's food production value chain while potentially enhancing operational efficiencies and supply chain integration.