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Rubis to retain Gulf staff as deal okayed

BUSINESS
By Macharia Kamau | Feb 26th 2020 | 2 min read
By Macharia Kamau | February 26th 2020
BUSINESS

 A Gulf Energy petrol station on Nairobi's Jogoo Road. The acquisition by Rubis will raise the firm's local footprint significantly.  [David Njaaga, Standard]

Kenyan authorities have given French oil giant Rubis Energie the go-ahead to acquire Gulf Energy.

The French major will, however, be required to retain the local oil marketer’s employees for two years.

The firm, which completed the acquisition of KenolKobil last March, will also be required to retain existing contracts between Gulf Energy and the small and medium enterprises operating within its retail stations.

These include the operators of shops and cafes located within the petrol stations.

Rubis said in November last year it had, through KenolKobil, signed a share purchase agreement with Gulf Energy.

In December, the firm said the deal had been concluded following approvals from the Competition Authority of Kenya (CAK) and the Energy and Petroleum Regulatory Authority (EPRA). The acquisition will see KenolKobi have the largest retail network in the country.

In approving the deal, CAK said Rubis would have to retain all 102 Gulf Energy employees for a period of two years before declaring any redundancies.

“The authority approved the proposed acquisition of control of Gulf Energy Holdings Ltd by KenolKobil,” said CAK in a statement.

Rubis will also be required to continue working with dealers currently operating Gulf Energy petrol stations until the contracts they had with Gulf lapse.

Most of the petrol stations that bear the Gulf brand are operated by dealers, although ownership is split in that there are those owned by Gulf, while others are owned by dealers.

The acquisition will increase KenolKobil’s market share across different market segments to 21.2 per cent.

It currently accounts for 15.4 per cent of the petrol stations in the country, while Gulf has a 5.8 per cent market share.

The current market leader, Total, has a 16.4 per cent market share followed by Vivo (16.2 per cent), which operates Shell-branded filling stations.

The deal also cements Kenolkobil’s dominant position in the jet fuel market, where it will increase its share by three per cent to 71 per cent.

“Whereas the transaction will occasion the merged entity gaining the market leader position, it will not confer a dominant position. Additionally, the merged entity will face competition from the other oil marketing companies who control 78.8 per cent of the market,” said CAK.

KenolKobil was valued at Sh36 billion when Rubis acquired it last year.

It also acquired the operations of Delta Petroleum in Uganda and Rwanda, further pushing up its market share in the region.

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