The Competition Authority of Kenya (CAK) has stopped Ramco Plexus Ltd, a subsidiary of Ramco Group, from sacking 21 employees of a local printing firm - Panthera Publishers Ltd - in a proposed merger which it has approved.
The watchdog on Tuesday approved the proposed acquisition of 90 per cent of the issued share capital of Panthera Publishers Ltd.
“Based on public interest considerations, the authority deemed it necessary to salvage the jobs of 21 Panthera Publishers employees in the merged entity. The proposed transaction was therefore approved on condition that these workers are not laid off,” said CAK Director-General Wang’ombe Kariuki in a statement.
Panthera Publishers is involved in the printing and supply of diaries, notebooks, journals, and organisers as well as digital printing.
CAK said the firm is only involved in soft paper printing, making this the relevant market in which the proposed merger was evaluated. Panthera outsources hard paper printing from various suppliers.
Ramco Plexus is a group of 10 companies that concentrate on printing and packaging.
Ramco Plexus was formed as a partnership between Ramco Group and Amethis Finance, a French private equity firm.
Ramco Group has been in operation since 1948 in Kenya and comprises over 35 firms in the hardware, print, manufacturing, stationery and service sectors.
CAK said based on the Significant Lessening of Competition (SLC) criteria, the market share of the merged entity will be approximately 14 per cent and is therefore not likely to lessen or distort competition in the sector.
“The merged entity’s market share will still be low when compared to other major players in the sector such as English Press Ltd, Longhorn Publishers, Icon Printers Ltd, Printwell Industries Ltd and Modern Lithographic Ltd,” said Mr Kariuki.
According to the competition watchdog, these firms collectively control approximately 33 per cent of the market and will therefore, in the CAK’s view, help sustain competition even after the merger is consummated.
The CAK’s assessment also showed that the soft paper printing industry has low barriers to entry and, therefore, more players are at liberty to join the market and enhance competition.