The Competition Authority of Kenya (CAK) has conditionally given its approval for the proposed acquisition of specific assets of Style Industries Limited by Hair Manufacturing Kenya Limited.
In a statement issued on Monday, CAK specified that it has granted approval on the condition that Hair Manufacturing Kenya Limited retains at least 70 percent of Style Industries’ employees under employment terms that are no less favorable than their current terms for a period of 12 months after the completion of the transaction.
The transaction’s negative public interest concerns, such as job losses, were also noted, citing that it will lead to the loss of 652 jobs, which is equivalent to 30 percent of the target’s 2,171 employees.
“The transaction qualifies as a merger under the Competition Act No. 12 of 2010 which stipulates that a merger or takeover may occur when an undertaking directly or indirectly acquires control over another business within Kenya,” CAK stated.
CAK asserted that, following its assessment, the acquisition is not anticipated to have adverse effects on competition within the market for hair extensions and wigs.
Hair Manufacturing Kenya Limited, a newly incorporated private limited liability company in Kenya, is set to acquire certain assets of Style Industries, a private limited liability company in Kenya that manufactures and distributes hair addition products, including braids, weaves, and wigs under the brand name Darling.
Style Industries is ultimately controlled by Godrej Consumer Products Limited (GCPL India).
CAK clarified, “The proposed transaction will not affect market structure and concentration since Style Industries will exit the market and be replaced by Hair Manufacturing. Additionally, the target will continue to face competition from other players controlling 95 percent of the market.”
The regulator concluded that the market structure and concentration in the sector for hair extensions and wigs will remain unchanged in Kenya, and the proposed transaction is not expected to lead to a significant reduction in competition within this market.
