Rubis Energie received conditional approval last month from Kenya authorities for subsidiary KenolKobils acquisition of oil products marketer Gulf Energy Holdings. The deal will slightly bolster KenolKobils position as Kenyas fourth-largest lubricant supplier.
Rubis and Gulf announced their deal in November, and the Competition Authority of Kenya issued its approval Feb. 25. Before the deal can be finalized, Rubis must accept the authoritys conditions, which include commitments not to eliminate jobs and to retain the current pay structure.
Paris-based Rubis is a petroleum products supplier doing business in about 30 countries, and it views the acquisition of Gulf Energy as an opportunity to grow in Kenya. KenolKobil is currently the third-largest fuel retailer in Kenya, but it would become the largest with a market share of 20 percent if the deal is completed.
Nairobi-based Gulf Energy has a similar core business profile but does business only in Kenya.
The competition authority said it evaluated the impact that the proposed transaction would have on Kenyas lubricants market and several other Kenyan markets: the importation of petroleum products, storage of petroleum products, liquid petroleum gas and jet fuel. It concluded that the deal would not impair competition in any of these industries. KenolKobil currently claims a 7 percent share of Kenyas lube market, according to the Petroleum Institute of East Africa.
Gulf Energy did not make the PIEAs list of the countrys eight largest lube suppliers. Haas, Oryx and Nock rounded at that group with market shares of 1 percent, so acquiring Gulf Energy would not raise KenolKobils share above 8 percent.
This low market share is unlikely to raise competition concerns, the authority stated. Further, the merged entity will face competition from other players, including market leaders such as Total and Vivo.