Nava Apparels has been granted go ahead to acquire the assets of Mombasa Apparel (EPZ), on condition it retains all the 4,478 employees on terms that are no less favorable than their current terms of employment.
- The Competition Authority of Kenya (CAK) found that the transaction is unlikely to negatively impact competition in the market for the manufacture of clothing apparel for export.
- Nava Apparels L.L.C-FZ is a limited liability company involved in the manufacture of clothing apparel for export to the United States of America (USA), Canada, and Europe. It does not have operations in Kenya.
- Mombasa Apparel (EPZ) Limited is an apparel manufacturing company, located in Kenya, and whose market is the United Arab Emirates and the United States of America. It does not sell its products in Kenya, nor have local subsidiaries.
“With regard to the proposed merger, post-merger, the merged entity’s market share will increase marginally to 3.83 per cent. The parties face competition from other players controlling 96.17 per cent of the market. Premised on this, the proposed transaction is unlikely to lead to a substantial lessening of competition in the market for manufacture of clothing apparel for export,” the regulator said.
The textiles and apparel sector is the third largest foreign exchange earner in Kenya. It has a three-tiered structure: there are 36 large companies in the EPZ, over 170 medium and large companies outside the EPZ, and more than 70,000 micro and small companies.
Currently, there are seven operational export processing zones which include: Athi River EPZ, Nairobi EPZ, Mombasa Port City EPZ, Kilifi EPZ, Malindi EPZ, Voi EPZ, and Kimwarer EPZ. Exports to the USA account for the largest share of garment/apparel exported from the EPZ zones in Kenya, under the African Growth and Opportunity Act (AGOA).
In 2019 the volume exported to the USA vis-à-vis the rest of the world was 95 per cent.
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