Each of the 2 supermarket chains has big internal issues (Nakumatt is grappling with post-fraud illiquidity while Tuskys still has the sibling rivalry within the directors) so the merger could complicate the new ‘mule’ more than if they had sorted out their issues before the merger, or not merge at all. What became of the proposed govt bail out plan for Nakumatt and Uchumi(another one on its knees)???
They must have conducted a thorough analysis of the situation before entering the merger. It is clear that Nakumatt still has the good will of the customers and enjoys strategic market locations. The only challenge was gaining the confidence of suppliers. Tuskys must have conducted an audit and established that Nakumatt can generate operational expenses if they restock. What remains is paying the accumulated debt that can be done with the help of a bank.
In the 1997 to 2004 there, Nakumatt bailed out Tuskys over liquidity issues. Its now return the favour time. Those two companies history are interlinked and I for one support this local solution to a local problem. Both companies could use the opportunity to reduce the family ran businesses to incorporate professional managers for the operations. Let the family members retreat from operations and settle for the board duty supervising the management.