•CAK directed that the target’s permanent employees be retained for a period of 12 months, from the completion date of the transaction, as one of the conditions.
•Kartasi Industries Limited was established in 1972 and over the years, its has grown to a full-scale manufacturing unit for stationery products in Kenya and beyond.
The Competition Authority of Kenya has approved the acquisition of the business and assets of Kartasi Industries Limited by Kartasi Products Limited (Kartasi Products).
Kartasi Products, the acquiring undertaking is newly incorporated in Kenya, for the sole purpose of the proposed transaction, the competition watchdog said yesterday.
The firm is affiliated to Pwani Oil Products Limited, makers of popular household cooking oils-Freshfri, Salit, and Fry Mate, according to lawyers familiar with the transaction.
The firm has also been involved in property brokerage, production and distribution of consumer goods like pineapple juice, food coloring and sugar syrups.
In a statement on Wednesday, CAK directed that the target’s permanent employees be retained for a period of 12, twelve (12) months, from the completion date of the transaction, as one of the conditions.
Kartasi Industries Limited (Kartasi Industries) was established in 1972 and over the years, its has grown to a full-scale manufacturing unit for stationery products in Kenya and beyond.
It is has been manufacturing stationery products like exercise books, notebooks, counter books, accounting books, diaries, spring files, box files, tapes, labels, pens and markers.
It brands include Kartasi, Afri, Njema and HIT.
The parties’ combined and relevant turnover for the preceding year was over Sh1 billion.
“The transaction, therefore, met the threshold for mandatory notification and full merger analysis as provided in the Competition (General) Rules, 2019,” CAK said.
Further, it notes that the merging parties’ activities do not overlap and the target’s products are distributed to entities across the country and, therefore, the relevant geographical market is national.
The educational and commercial stationery market in Kenya has over 400 manufacturers and suppliers.
Main players and their approximate market shares in the industry includes Twiga Stationers and Printers Ltd (38.8%), Kenafric Manufacturing Limited (20.9%), Kartasi Industries Limited (9.7%) and Economic Industries Limited (9.6%).
Guaca Stationers Limited has a 6.5 per cent share, Elite Offset Ltd (5.7%), Safari Stationers (K) Ltd (4.3%), National Printing Press Ltd (0.5%), and others (4.4%).
Post-merger, there will be no change in the market structure and concentration since parties’ activities do not overlap, CAK said.
“ Therefore, the proposed transaction is not likely to lead to a substantial lessening of competition in the relevant market or raise any competition concerns,” it noted.
During merger analysis, the Authority also considers the impact that a proposed transaction will have on public interest.
The public interest concerns considerations include theextent to which a proposed merger would impact employment, impact on competitiveness of SMEs, impact on particular sectors and impact on the ability of national industries to compete in international markets.
The acquirer has agreed to retain all the 69 permanent employees for at least one year from the completion date of the transaction.