The Competition Authority of Kenya (CAK) has approved, without conditions, the proposed acquisition of Cummins C&G Holdings Ltd by Car & General (Trading) Limited.

In a statement, CAK said the approval was granted based on the finding that the transaction is unlikely to negatively impact competition in the market for power generators and engines and the market for filtration equipment and coolants.

Additionally, the transaction will not elicit negative public interest concerns.

“With regard to the proposed merger, the transaction is not expected to raise competition concern post-merger since it is an increase of shareholding by the acquirer in the target. Therefore, the market structure and concentration will be unaffected,” CAK said.

“As per the parties’ submissions, this transaction will not elicit negative public interest concerns. Specifically, regarding employment, the target’s 67 employees will retain their employment under the same terms,” it added.

The acquirer, Car & General (Trading) Limited, is a wholly owned subsidiary of Car & General (Kenya) Plc, a company listed on the Nairobi Securities Exchange.

Its principal business activity is the supply, distribution, and maintenance of power equipment, household goods, agricultural tractors and implements, marine engines, motorcycles and three-wheeler vehicles, commercial laundry equipment, commercial engines, forklifts, excavators, asset financing and property holding.

The target, Cummins C&G Holdings Limited, a company incorporated in Mauritius, is a joint venture also owned by Car & General (Trading) and CMI Africa Holdings B.V.

Its main commercial activities are the distribution of power generators and diesel engines, maintenance of power equipment, and sale of filtration equipment and coolants.

Over the next three years, Kenya’s power generator market is predicted to expand substantially on account of the establishment of Special Economic Zones as well as the development of government-backed infrastructure projects, including technology cities and expansion of roads.

The increased demand for power is expected to boost the market for generators. Additionally, the growing telecom sector, rising manufacturing industries as well as the expansion of business parks is expected to further spur the market for diesel generators.

Mobile solar panels are emerging as a substitute for diesel generators in remote locations. Mobile solar panels are emerging as a substitute for diesel generators in remote locations.