The Competition Authority of Kenya (CAK) has approved acquisition of a minority stake in retail chain Naivas by French private equity fund Amethis Finance.
The watchdog while approving the acquisition directed the merged entity to honour all current contracts made by Naivas with local suppliers besides payment of all exiting debts.
The approval sets the stage for the continued expansion by Naivas as it seeks to grow its footprint across the country in the fight for market share in an increasingly competitive market.
Amethis Finance last month disclosed the planned acquisition of about 30 percent in the local retailer in the deal whose value was however undisclosed.
The French fund however injects invests between Sh1.1 billion and Sh4.4 billion (euro 10 million to 40 million) in target firms.
“The Competition Authority has authorised the proposed transaction as set out herein on condition that the merged entity to honour all the current contracts with suppliers for the duration of those contracts,” said CAK in a gazette notice on Friday.
“The merged entity to ensure that prior to implementation of the proposed transaction, all the reconciled and agreed outstanding debts owed to its suppliers are paid to the extent permitted by the contracts entered into between the parties.”
Other deals by the French equity firm are minority acquisitions in printing and packaging firm Ramco Plexus in 2014, confectionery maker KenAfric in 2016, and Chase Bank Kenya in 2013.
Naivas is on an expansion drive and last December opened its 60th outlet in Nakuru’s West Side mall in the space vacated by the collapsed Nakumatt Holdings.
The retailer recently acquired Nakumatt’s six stores in a deal estimated to be over Sh400 million marking its move to take over the market previously controlled by the defunct Nakumatt and Uchumi amid increasing competition from international retailers like Carrefour and Game.