Cash-strapped flower exporter Oserian Development Company Limited has received nod to be acquired, offering a lifeline to more than 700 workers who were staring at job losses.
The Competition Authority of Kenya (CAK) has unconditionally approved the acquisition of Oserian’s floriculture business and certain assets by a newly formed company— Bohemian Flowers Limited.
Bohemian Flowers has been formed by Kongoni River Farm Limited—a company involved in the cultivation of flowers for export—for the purpose of completing the transaction.
CAK said the acquisition is a rescue opportunity for Oserian, which has been loss-making and currently with liabilities having outstripped its assets.
“The business has consistently recorded losses since 2017. Additionally, the business is currently in a negative equity position. Based on the foregoing, the Authority noted that the proposed transaction is likely to salvage a failing firm,” said CAK.
Bohemian has indicated to CAK that it intends to absorb all the Oserian employees, saving them from layoffs as was the case with Karuturi flower farm which has released thousands of workers in recent past.
“The Authority is of the view that the proposed transaction will not have negative effects on employment, but instead salvage livelihoods for over 700 jobs and enhance Kenya’s competitiveness in the market for cut flowers,” said CAK.
Oserian is involved in the business of growing, processing, and exporting nearly 100 percent of its flowers to international market especially Europe, Asia and the US but has struggled to return a profit.
The acquired firm looks set to strengthen its financial muscles to compete with other main growers and exporters of flowers such as AA Growers, Afriflora, Aquila Flowers, Blacktulip, Flamingo Flowers Herbug Roses, Hola Roses, Isinya Roses, Panda Flowers and Batian Flowers.
Oserian and Bohemian Flowers’ combined assets for the preceding year was more than Sh1 billion, therefore making it mandatory for them to file for notification and full merger analysis in line with the Competition (General) Rules, 2019.