A Tuskys supermarket branch. [Photo/the-star.co.ke]
The competition regulator has rejected the proposed Tuskys’ merger with troubled Nakumatt Supermarkets.
According to the regulator, the application for regulatory review was done under the wrong clause of the antitrust law.
In a letter to the two retailers seen by the Business Daily, the Competition Authority of Kenya (CAK) has advised that a fresh application be made for an exemption.
CAK wants the new application to be made from regulations on anti-competitive behaviour rather than approval for the merger they had sought.
The CAK reckons that the proposed transaction does not amount to a merger since Nakumatt’s ownership structure will not change upon conclusion of the deal.
The two retailers are pursuing an agreement that will see Tuskys provide management services, a loan, and debt guarantees to Nakumatt.
According the deal, Tuskys would have control over operations, even as Nakumatt’s ownership remains unchanged.