NAIROBI, Kenya, Sept 19 – Tuskys and Nakumatt Supermarkets have confirmed they have been holding “confidential discussions” to thrash out a strategy with the aim of creating a joint approach that will salvage struggling Nakumatt.
In a joint statement, the two retailers, however, say a merger deal is yet to be finalized citing the complexity of the transaction which involves a number of stakeholders including employees, suppliers, landlords and lenders.
“These confidential discussions are continuing and although the engagement has been positive and good progress has been made, it is important that we acknowledge that a formal agreement is yet to be reached and will be subject to notification and approval by regulators and lenders.”
The discussions between the two giant supermarkets have focused on exploring potential options for synergies, co-operation, and business integration.
The statement shines a light on one the reasons Tuskys has agreed to discuss a rescue plan for Kenya’s biggest retailer.
“The founders of Tuskys and Nakumatt have enjoyed a close business and family relationship spanning more than four decades and share a common heritage as pioneer Kenyan retailers from Nakuru County and are excited by the opportunity for the business integration,” notes the statement.
Tha families of Nakumatt founder Maganlal Shah and Tuskys Joram Kamau – who now run the retail chains – have in the past come to the rescue of each with other in different situations. trace their roots
Atul Shah, Nakumatt Managing Director, mediated between the five sons of Mr. Kamau when an ugly sibling battle threatened to sink Tuskys in 2013.
Once the largest supermarket in the region, Nakumatt has seen its fortunes dwindle in the recent past shutting over 10 outlets as shelves remain empty in the open branches.
The government has pressed for a solution due to the spillover effect including loss of jobs and mounting debt owed to suppliers in event of a collapse of the retailer.