CFAO Motors Kenya is set to acquire Kenya Vehicle Manufacturers (KVM) in a Sh. 1 billion deal. The deal will see the Toyota dealer own a controlling stake of up to 98 per cent in the Thika vehicle assembler.

Currently, CFAO Motors Kenya – which was previously known as Toyota Kenya Limited – owns a 32.5 per cent stake in KVM while the remaining stake is owned by the Government of Kenya at 35 per cent and CMC Holdings at 32.5 per cent.

“The proposed transaction involves investment by CFAO Motors Kenya in KVM through an equity injection into the target by subscription for additional shares,” the Competition Authority of Kenya (CAK) stated in a notice.

“[The proposed transaction] will result in the dilution of other KVM shareholders to ownership of approximately 2 per cent. Effectively, CFAO Motors Kenya will obtain direct control of the target [98 per cent shareholding].”

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Up until now, CFAO Motors has been relying on Simba Corp’s Associated Vehicle Assemblers (AVA) plant that is based in Mombasa for the production of a majority of its vehicles.

“The rationale for the transaction, as provided by the parties, is to enable [KVM] to settle its outstanding debts, revamp its operations, including assembly business,” stated the CAK. “The CFAO’s plan to revive the KVM by injecting capital will, in the long-term, make it profitable and create more employment opportunities.”

The CFAO motor vehicle dealer changed its name from Toyota Kenya to in February 2022 in a move that was aimed at enhancing its value proposition in the automotive market.

In 2016, Toyota Tsusho Corporation (TTC), the parent company, acquired the Corporation for Africa & Overseas (CFAO) (based in Paris, France) along with all its subsidiaries and networks across Africa.

TTC went on to form an African Division with all operations in Africa reporting to CFAO Paris. CFAO is a key player in the fields of mobility, healthcare, consumer goods, infrastructure, and energy in 39 countries on the African continent.