In a letter to legal representatives of the Nairobi Securities Exchange-listed firm, the regulator said the deal does not require its authorisation to proceed.
Delta, the owner of multiple businesses including Shreeji Chemicals, plans to use the purchase of an 84 percent stake in NBV to automatically acquire a listing status and shift the company to cement production.
It will spend Sh83 million in the deal, technically known as reverse takeover, to take control of NBV whose shoe retailing business has collapsed.
The Competition Authority of Kenya (CAK) has allowed the buyout of loss-making Nairobi Business Ventures, which used to sell the K-Shoe brand of footwear, by Dubai-based Delta International FZE.
In a letter to legal representatives of the Nairobi Securities Exchange-listed firm, the regulator said the deal does not require its authorisation to proceed.
“We wish to inform you that the proposed transaction is a merger within the meaning of sections 2 of the Competition Act No. 12 of 2010,” CAK wrote in the letter dated November 10, 2020.
“However, the combined value of the assets of the parties for the preceding year, 2019 was Sh126.9 million which is less than Sh500 million. Therefore, the transaction is an exclusion that does not require prior authorisation by the Authority before implementation.”
Delta, the owner of multiple businesses including Shreeji Chemicals, plans to use the purchase of an 84 percent stake in NBV to automatically acquire a listing status and shift the company to cement production.
It will spend Sh83 million in the deal, technically known as reverse takeover, to take control of NBV whose shoe retailing business has collapsed.
Existing shareholders of NBV will be squeezed into a 16 percent stake in the company which will change its business to cement manufacturing and other industrial undertakings.
As a subsidiary of Delta, NBV’s listing status will give it visibility besides making it easier to access capital.
NBV, which closed all its stores amid heavy losses, says selling a majority stake to Delta offers an opportunity to change direction to a profitable future.
A total of 415 million shares will be offered to Delta in the deal that was to be signed on November 7, a day after the annual general meeting.
NBV will become the third NSE-listed cement manufacturer after Bamburi Cement and East African Portland Cement Company (EAPCC).
For Delta, cement will mark an expansion and diversification of its manufacturing portfolio.
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