The Competition Authority of Kenya (CAK) has given the green light for Kenafric Manufacturing Limited to acquire the business and assets of Economic Industries Limited.

The unconditional approval follows an extensive analysis which concluded that the deal poses no threat to competition in the stationery market or to public interest.

Kenafric, a Kenyan firm controlled by Zarrar Holding Limited, is a major player in manufacturing and trading products such as stationery, PVC and EVA footwear, and rubber items.

Economic Industries, the acquisition target, specialises in school and office stationery, including exercise books and writing pads.

This transaction enables Kenafric to expand its presence in the stationery market, with Economic Industries planning to exit and liquidate its business.

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According to CAK, the acquisition is unlikely to negatively impact competition due to the relatively low market share of the merged entity and the availability of significant competitive pressure.

Post-merger, Kenafric’s market share in Kenya’s stationery sector will rise from 12.3 per cent to 22.6 per cent, placing it as the second-largest player behind Twiga Stationers and Printers Ltd, which holds 49.4 per cent.

“This transaction is unlikely to lead to a substantial lessening or prevention of competition in the market for stationery in Kenya,” CAK said, citing data that showed 77.4 per cent of the market will still be controlled by other players, including Kartasi Industries and Guaca Stationers.

The stationery market in Kenya has shown resilience, registering a 23.33 per cent year-on-year growth in 2021. New entrants like Twaweza Printing Press Limited and Red Ring Industry Limited have further reinforced the market's competitive landscape.

Additionally, low costs for diversification into national markets have reduced barriers to entry, supporting the Authority’s conclusion.

From a public interest perspective, CAK highlighted that the merger would not lead to job losses.

"All employees will be retained under their current terms of engagement," as per the parties’ submissions. Furthermore, the transaction is not expected to harm small and medium-sized enterprises or reduce Kenya’s ability to compete in international markets.

Under Kenyan law, mergers exceeding a combined turnover or asset value of Sh1 billion require CAK’s approval.

This transaction met that threshold, triggering a comprehensive review.

By securing approval, Kenafric has taken a significant step toward strengthening its footprint in the stationery sector while maintaining fair competition and safeguarding public welfare.