The Competition Authority of Kenya has approved the merger between Rubis Energy, the French Oil distributing Company, and Gulf Energy, but with conditions to retain all 102 workers for at least two years and retention of current pay structure and remuneration.
“During merger analysis, the Authority also considers the impact that a proposed transaction will have on public interest,” says CAK.
“The Authority approved the proposed acquisition of control of Gulf Energy Holdings Limited by KenolKobil Plc on condition that:
i. For a period of twenty-four (24) months from the date of implementation of the proposed transaction, the merged entity shall;
a. Not declare any target’s 102 employees redundant;
b. Not reduce the basic remuneration for all employees transferred to the merged entity; and
c. Ensure that other employment benefits shall, taken as a whole, be no less favorable than those provided as at the date of the signing of the agreement.”
The authority has also set a condition that the merged entity ensures that all deals and terms signed between Gulf Energy and SMEs be maintained for at least 24 months.
The merged entity is required to file reports about its operations for at least two years.
Gulf Energy sold 470 000 CBM of petroleum products in 2018. It supplies retail customers through 46 petrol stations, commercial customers (notably supplying power plants and large industrial consumers), aviation fuels, LPG and lubricants.
The merged entity will have a combined market share of 10.6%. Other players according to the Petroleum Institute of East Africa (PIEA) include Total (38.6%); Vivo (34.2%); Libya Oil (OLA) (10.1%); Hashi (3.5%) Hass (1.0%); Oryx (1.0%); Nock (1.0%).
KenolKobil, which is owned by French multinational Rubis Energie makes it the largest market share in Kenya of 21.2 percent, overtaking Total Kenya and Vivo Energy Kenya which had market shares of 16.4 percent and 16.2 percent respectively.
It further disclosed that the merger between KenolKobil and Gulf Energy will not lead to unfair market dominance.
The relevant product markets for the proposed transaction are the markets for; importation of petroleum products; storage of petroleum products; retail markets for petroleum products; lubricants, LPG and petroleum fuels and market for jet fuel.