Distell operation in Cape Town.

Nairobi - Kenya has agreed to sell a 26 percent stake in a wines and spirits marketer to South Africa's Distell Group for 860 million shillings ($9.81 million), Kenya's Privatisation Commission said on Friday.

The sale of government-owned shares in Kenya Wine Agencies Limited (KWAL) to Distell is part of a bigger privatisation programme first announced in 2011 as a strategy to help improve the east Africa nation's finances and to transfer the running of businesses to the private sector.

Distell, whose brands include Amarula liqueur, Two Oceans wines and Savanna cider, is part of a host of South African companies increasingly looking to fast-growing African markets to offset sluggish performance at home, where consumers are hampered by high debt levels and sluggish economic growth.

Kenya also plans to sell a 51 percent stake in five sugar millers to strategic investors as it looks to complete reforms aimed at making its sugar industry competitive.

The government has previously announced plans to sell its shareholding in the country's oil pipeline company, its main power producer, Kenya Electricity Generating Company and three luxury hotels. - Reuters