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Nakumatt ,Tuskys write to CAK on merger plan

Tuskys Supermarkets has written to the rivalry overseer looking for advice on its intended merger with rival Nakumatt. This puts into motion efforts to save the bankrupt trader from collapsing. Dan Githua, Tuskys’ chief executive, said the merchants equally wrote an official notice to the Competition Authority of Kenya (CAK) alerting them of their planned merger and how to proceed.

Nakumatt has faced a threat in the latest months after a holdup in receiving new funds and failure to refinance its responsibilities led to failure to pay its staff, suppliers and lenders. A merger with Tuskys, which is still under discussion owing to due diligence and support from regional competition regulators, is the most recent scuttle by Nakumatt.

Mr. Githua said they have filed pre-approval documents with CAK explaining what the planned business deal is all about. A merger of the firms will result in the major retailer in the nation, with competitors such as Naivas Supermarket and Uchumi Supermarkets far behind.

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CAK director-general Wang’ombe Kariuki said that if they want to have a management accord, they have to seek an exemption. He also added that if they choose to merge, they have to follow the law. Mr. Kariuki in a telephone interview stated that given the state the retail sector is in they shall fast-track whichever application they submit.

Nakumatt’s managing director and part-owner has been adamant the retailers are seeking a merger. One of the CAK’s key authorizations is to guarantee that businesses do not engage in practices that may hinder competition to the detriment of the consumers. The watchdog is nonetheless allowed to grant exemptions in unusual cases.

These consist of maintaining or promoting exports; improving, or preventing decline in the production or distribution of goods or the provision of services; steadiness in any industry. An exemption can also be granted if its net effect, while lessening  competition, is extremely favorable to the public.

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