The Competition Authority of Kenya (CAK) saved 12,470 jobs last year after imposing tough conditions requiring firms that merged or acquired other companies to retain the majority of their workforce.
Mergers and acquisitions are traditionally followed by job cuts in the quest for new management or leaner operations.
The competition watchdog imposed the conditions forcing companies to retain workers for between one and three years after mergers and acquisition deals, saving crucial jobs in an economic setting that saw firms lay off in the wake of the Covid-19 pandemic.
The CAK annual report details several applications where companies were only allowed to merge operations is the guaranteed job security of their workers.
The include KCB #ticker:KCB which bought National Bank #ticker:NBK, NIC which merged with CBA to form NCBA #ticker:NCBA, National Cement which bought Athi River Mining and Coca Cola beverages which bought Almasi from Centum among others.
KCB which concluded the merger in September 2019 was barred from firing workers for two years to 2021 while NCBA was given 12 months to the end of last year.
Coca Cola will not be able to fire workers at Almasi until 2022 following the three-year freeze from October 2019.
KCB was only allowed to cut 10 per cent of the National Bank workforce because it had requested it needed to restructure the top management of the lender.
At least seven top managers at the National Bank of Kenya including former CEO Wilfred Musau have been replaced in the wake of KCB Group acquisition of the lender.
“The Authority approved the acquisition of National Bank of Kenya Limited by KCB on condition that 90 per cent of the merged entity’s employees will be retained for a period of eighteen (18) months from the closing of the merger,” CAK Director-General Wang’ombe Kariuki said.
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