Rubis Energie (KenolKobil) has been given a go-ahead by the Competition Authority of Kenya to take over Gulf Energy, though under tough conditions.
The merger makes Rubis Energie the largest oil marketer in the country with a market share of 21.2 percent overtaking Total Kenya (16.4 percent) and Vivo Energy (16.2 percent).
The merged entity will be required to retain the current employees, pay structure and remuneration.
“The Authority is of the view that the proposed transaction is likely to lead to redundancies. The proposed merger is likely to affect the arrangements between the SMEs and Gulf and occasions the need to ensure that the SMEs are protected post-transaction,” CAK said.
CAK defended the merger, saying that it would not lead to an unfair market dominance.
Gulf is reported to have sold at least 470,000 cubic metres of petroleum products in 2018. Its sales amounted to at least Ksh36.7 billion in 2018. It has 46 fuel stations across the country that deal with all oil products including LPG, lubricants, petrol, diesel and paraffin among others.
It also owns two fuel depots and a LPG storage and filling plant and lubricants unit.
KenolKobil was acquired at a cost of Ksh35.6 billion by Rubis in a takeover in November last year in a new ownership structure that saw the firm delisted from the Nairobi Securities Exchange.