The Competition Authority of Kenya has approved the proposed acquisition of certain assets of Style Industries Limited by Hair Manufacturing Kenya Limited.
The authority, however, placed a condition that at least 70% of the target firm’s employees are retained on employment terms that are no less favourable than their current terms for 12 months following completion of the transaction.
In a statement to newrooms, CAK says the approval has been granted based on the finding that the transaction is unlikely to negatively impact competition in the market for hair extensions and wigs. However, the transaction will elicit negative public interest concerns.
Hair Manufacturing Kenya Limited is a private limited liability company incorporated in Kenya. It does not have any operations in Kenya since it is newly incorporated for purposes of this transaction.
Style Industries, on the other hand, is a private limited liability company incorporated in Kenya. Its principal activity is manufacturing and distribution of hair addition products such as braids, weaves and wigs under the brand name Darling.
Style Industries is ultimately controlled by Godrej Consumer Products Limited (GCPL India).
The proposed transaction involves the acquisition of certain assets — plant & machinery, office equipment and inventory — of Style Industries by Hair Manufacturing.
“The transaction therefore, qualified as a merger within the meaning of Section 2 and 41 of the Competition Act No. 12 of 2010. The Act stipulates that a merger or takeover may occur when an undertaking directly or indirectly acquires control over another business within Kenya. This may happen through, among others, purchase/lease of shares, exchange of shares, vertical integration,” CAK says.
The authority adds: “Further, merging parties whose combined turnover or assets, whichever is higher, is over Ksh. 1 Billion are required to seek approval from the Authority prior to implementing the proposed transaction. The transaction between Hair Manufacturing and Style Industries met this threshold for mandatory notification and full analysis as provided for in the Competition (General) Rules, 2019.”
