Kenya's two biggest retail chains merge to control over 70% of the market
Nakumatt had unsuccessfully sought government intervention and was headed for closure.
Cash-strapped retail chain Nakumatt Supermarket has entered into a merger agreement with one of its biggest historical competitor in a bid to save its fast dwindling fortunes.
Nakumatt supermarket which appeared to be headed for closure and faces several lawsuits has signed a merger agreement with Tuskys supermarket that will see its doors remain open at least for the next six years.
Also read: HOW NAKUMATT SEALED ITS FATE AFTER SENIOR STAFF CONSPIRED TO KILL INTERNAL AUDITOR FOR USD800
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As per the deal, the two retail will remain separate entities but Tuskys will take over the management of Nakumatt.
Nakumatt, on its hand which has retail stores in Kenya’s major towns, will now access stock from suppliers using Tuskys supermarkets’ goodwill and value chain.
Nakumatt which is a family owned business had unsuccessfully sought government intervention and was headed for closure until Tuskys came to its rescue.
Also read: KENYA'S LARGEST RETAIL CHAIN HIRES FORMER TESCO EXECUTIVE TO LEAD IT BACK TO PROFITABILITY
The Atul Shah family who until the deal was struck were the ones running the chain have agreed to step down and pledge their shares to the financiers for a period of six years according to inside sources privy of the deal.
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Nakumatt supermarket was Kenya’s once largest retail chain and had even expanded across the region with stores in Uganda and Tanzania, however, years of financial mismanagement has seen the ‘elephant’ sink to its knees and shut down several stores, lay off hundreds of its staff and its shelves remained empty.
The deal is now expected to be scrutinised by the competition authorities.
Tuskys and Nakumatt are Kenya’s biggest retailers, with more than 115 stores and control more than 70% of the retail market.
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