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.
CAK
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 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.
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