Dubai-based healthcare firm buys local drugs distributor

Dubai-based healthcare company Shalina has acquired Provexa Pharma Kenya Limited for an undisclosed price. FILE PHOTO | SHUTTERSTOCK

Dubai-based healthcare company Shalina has acquired Provexa Pharma Kenya Limited for an undisclosed price, adding to the flurry of acquisitions that have recently been recorded in Kenya’s pharmaceutical sector.

The competition watchdog on Monday gave Shalina Healthcare the greenlight to acquire all the issued issues of Provexa, a local wholesale distributor of cheap generic drugs, giving it a foothold in what is turning into a highly competitive sector.

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While approving the acquisition, the Competition Authority of Kenya (CAK) noted the acquisition was unlikely to flout antitrust rules.

“This approval has been granted on the finding that the transaction is unlikely to negatively impact competition in the market for wholesale distribution of pharmaceutical products nor elicit negative public interest concerns,” said the CAK.

According to the watchdog, with a market share of less than 2.3 percent, the merged entity will face competition from wholesale pharmaceutical products supplied directly to hospitals and pharmaceutical retailers.

Shalina, a privately-owned company with a presence in eight African countries, entered the Kenyan market in 2019 by acquiring Pharmaceutical Manufacturing Company (Kenya) Limited.

The majority of the company’s operations are in prescription and over-the-counter medication, such as antimalarials, antibiotics, anti-inflammatories, and nutrition.

The formal medical distribution sector has attracted major investors, including private equity funds as a health-conscious middle-class population spawns a booming healthcare market.

In February, Mauritian conglomerate IBL Group bought an undisclosed stake in Nairobi-based pharmaceuticals distributor Harley’s as part of a consortium that has taken control of the company.

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The multinational, which had earlier bought a stake in Naivas Supermarket, bought a majority stake in Harley’s which supplies pharmaceutical products and medical equipment.

Goodlife Pharmacy, for instance, has changed hands multiple times as institutional investors seek to benefit from increased spending on healthcare.

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