Varun faces final hurdle in Dairibord stake deal

LIVINGSTONE MARUFU

Varun Beverages (Zimbabwe) faces a final regulatory hurdle in its proposed acquisition of a 48.79% stake in Dairibord Holdings Limited, with the Competition and Tariff Commission (CTC) assessing whether the transaction could weaken competition in Zimbabwe’s consumer goods market.

The proposed deal, if approved, would make Varun a substantial shareholder in the listed food and beverages group, but would not give it control. Dairibord’s ownership structure would therefore remain largely unchanged in the near term, pending any further transactions.

It is understood that Varun had emerged as the sole contender after seeing off competition from its long-standing rival, Delta Corporation, for the Dairibord stake.

The regulator has invited interested parties and members of the public to submit written representations on the proposed transaction by October 1, 2026.

The inquiry will determine whether the acquisition is likely to substantially lessen competition or result in a monopoly situation that could be contrary to the public interest.

“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 CTC said.

The commission is expected to conclude its assessment within the next fortnight.

The investigation will examine how the merging parties and other relevant market participants operate before the proposed transaction, as well as how the market could evolve if the deal is approved. The regulator will also consider other issues relevant to the competitive impact of the acquisition.

The development comes as three major Dairibord shareholders have separately approached the CTC over a proposed merger that could pave the way for the disposal of their combined controlling interest to a third party.

Equivest Asset Management (Pvt) Ltd, Mega Market (Pvt) Ltd and Mutare Mart & Exchange (Pvt) Ltd, which collectively hold more than 51% of Dairibord’s issued ordinary shares, have submitted a merger notification to the competition regulator in connection with the proposed disposal.

The proposed consolidation could facilitate a change in control at one of Zimbabwe’s largest consumer goods companies, although the precise ownership implications will depend on the outcome of the regulatory process and any subsequent transaction.

The overlapping developments have heightened uncertainty around Dairibord’s shareholding structure, prompting investors to closely monitor further disclosures from the company and the relevant authorities.

Dairibord has said further announcements will be made in accordance with applicable regulations and listing requirements.

The potential change in ownership comes as the company pursues a separate restructuring of its capital-market presence.

Dairibord is progressing with plans to voluntarily delist from the Zimbabwe Stock Exchange and migrate to the United States dollar-denominated Victoria Falls Stock Exchange (VFEX).

The details of the proposed migration are expected to be set out in a circular to shareholders to be issued in due course.

The combination of a potential change in ownership and the planned VFEX migration places Dairibord at the centre of investor attention, with the market awaiting clarity on the prospective buyer, the transaction value and the company’s future strategic direction.

A change in substantial ownership could influence Dairibord’s strategy, capital allocation and management priorities, depending on the objectives of the incoming investor.