NAIROBI, Kenya, Mar 11 – Hair Manufacturing Kenya Limited will be required to retain 70 percent of Style Industries Limited, a maker of Darling hair, employees following approval by the Competition Authority of Kenya (CAK) for the former to acquire certain assets of the latter.
The workers will also be retained for 12 months post-transaction, as per the transaction agreement.
In the deal, which has already been approved by the CAK, Hair Manufacturing Kenya Limited will acquire plant and machinery, office equipment, and inventory of Style Industries Limited.
CAK says that it approved the deal as it was unlikely to negatively impact competition in the market for hair extensions and wigs, despite eliciting negative public interest concerns.
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.
Whereas Hair Manufacturing Kenya Limited is a newly incorporated company in Kenya, Style Industries Limited manufactures and distributes hair addition products under the brand name Darling, controlled by Godrej Consumer Products Limited (GCPL India).
“The approval is conditional upon Hair Manufacturing retaining at least 70% of Style Industries’ employees on favorable terms for 12 months post-transaction,” CAK noted.
It nonetheless emphasized that approval by the authority doesn’t exempt parties from complying with other legal and regulatory requirements, particularly those related to employment.
