CAK relaxes merger rules for small firms
Firms with less than Sh1 billion turnover will not be required to file a merger notification under a new proposal. All firms are currently required to notify the Competition Authority of Kenya (CAK) of merger plans irrespective of the value.
The competition watchdog will exempt firms with less than Sh1 billion turnover from filing a merger notification under a new proposal. All firms are currently required to notify the Competition Authority of Kenya (CAK) of merger plans irrespective of the value to enable the regulator ascertain if it will have a negative impact on competition. The amendments in the Competition Act will also exempt the companies from doing double notification at the national level and at the Common Market for Eastern and Southern Africa (Comesa) if it has no competition implication to Kenya.“The Parliament has given CAK a leeway to exempt small firms from filing a merger notification and this will come into effect once it has been adopted by the legislatures,” said CAK director general Kariuki Wang’ombe in an interview.
Mr Wang’ombe said the move will help create a good environment for investors by doing away with bureaucracy. Comesa Competition Commission (CCC) is an affiliate of the regional business bloc that oversees all mergers and acquisitions as well as checks anti-competitive practices within the 19 Comesa member-states in Africa. It has been operational since 2013. CCC has of late handled a number of mergers between multinationals that have presence in Kenya.Last year, CCC cleared the acquisition of Monsanto Company by Bayer. CCC received notification in relation to acquisition of Monsanto Company by Bayer at an estimated cost of Sh6.2 trillion cash deal. The global deal included the takeover of the latter’s Kenyan subsidiary.Businessman Chris Kirubi says he owns 45 per cent in Bayer East Africa. “I don’t know what I will own (in the merged business). We are yet to work out those figures,” Mr Kirubi said at the time.READ: Comesa gives nod to Monsanto buyout by BayerCAK had earlier approved the buyout of Monsanto Kenya by Bayer’s investment vehicle Bayer Aktiengesellscharl KWA Investment Company through a gazette notice.
In 2017 CCC probed the acquisition of General Motors East Africa (GMEA) by Isuzu with a view to finding out if it would interfere with competition in the region.In a notice of inquiry into GMEA proposed acquisition of the 57.73 per cent stake in Isuzu, CCC intended to embark on an inquiry after receiving notification of acquisition from involved parties.In 2016, Eveready sought the approval of CCC for importation and distribution of a range of products on behalf of international companies following an agreement entered into between Eveready and three multinational companies that would see them distribute their products in the regional market.Kenya has dominated mergers and acquisitions in the Comesa trading bloc.