CAK safeguards 14,000 jobs in flower company mergers

Competition Authority of Kenya acting Director General Dr Adano Roba. FILE PHOTO | LUCY WANJIRU | NMG    

By EDNA MWENDA More by this Author

Conditional approvals for the merger of four flower firms helped protect 14,000 jobs in the year to June last year, the competition watchdog has revealed, handing relief to thousands of households drawing their livelihood directly or indirectly from the agricultural businesses.

The Competition Authority of Kenya (CAK) said it invoked public interest in approval terms to safeguard jobs that may have been lost in the year to June 2023 amid a rise in merger transactions.

"Notably, there was an increased merger activity in the flower industry with capital injections in four flower farms securing over 14,000 jobs for workers in the sector," CAK said in its annual report.

The merger transactions recorded last year included the acquisition of the Naivasha-based Bigot Flower Kenya by the United Kingdom investment holdings company Flamingo Horticulture Investment Limited and the takeover of Karuturi Limited by Shalimar Flowers Kenya Limited.

Other merger deals involved the acquisition of the entire issued share capital of Dutch Flower Group Phima Flowers by Marcoz Holdings B.V. Marcoz directly controls two companies operating in Kenya; one specialising in logistics solutions for fresh-cut flowers, herbs, cuttings, produce, and fruits moving through key international trade lanes; while the other consolidates flowers from growers in Kenya and ships them worldwide.

The Competition Act stipulates that the authority bases its decision not only on the buyer attaining a dominant position in the market but also on "the extent to which the proposed merger would be likely to affect employment."

“During analysis of merger or acquisition, the CAK analyses the effect that a transaction will have post-merger in order to determine the impact on competition in a sector and its impact on public interest. Public interest considerations are concepts that seek to protect the economic welfare of Kenyans and the country,” CAK acting Director-General, Adano Wario said.

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