The corporate logo of De La Rue is seen at De La Rue Malta at Bulebel
Industrial Estate in Zejtun, Malta on April 24, 2018. FILE PHOTO
The acquisition of a De La Rue PLC subsidiary
by American firm, HID Corporation Ltd, will not affect the currency
printing unit in Kenya, officials said Wednesday.
The
Competition Authority of Kenya (CAK) has clarified that the subsidiary
being sold is De La Rue Kenya Limited which focuses on printing a wide
range of security documents such as debit and credit cards and a wide
range of electronic government identity solutions (passports and
national identity cards),
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The
unit that prints currency is De La Rue Kenya EPZ Limited (DLR), which
is a joint venture between De La Rue PLC of UK and Kenya's national
Treasury respectively. The National Treasury holds a 40 per cent stake
in DLR while De La Rue PLC holds the remaining 60 per cent.
“In
Kenya, the acquirer (HID Corporation) and target (De La Rue Kenya Ltd)
both supply electronic government identity solutions (passports and ID
cards) to Kenyans,” CAK said in a statement.
De
La Rue Kenya Ltd which is being acquired by HID Corporation is
“controlled by De La Rue PLC” with no Kenya government stake in the
company.
“It is important to note that DLR is not part
of the proposed transaction and will continue with its ownership and
operation (of printing of currency in Kenya),” the Authority stated.
CAK
last week approved the proposed acquisition of 100 per cent of the
issued share capital of De La Rue Kenya Limited by HID Corporation Ltd
“on condition that all the contracts that the target (De La Rue Kenya
Limited) has with the government of Kenya are honoured.”
The announcement was contained in the Kenya Gazette Notice No. 8122 which came out on Friday.
De
La Rue in June announced on its website that “it has agreed the sale of
its International Identity Solutions business (‘International ID’) to
HID Corporation Limited (‘HID Global’), an ASSA ABLOY Group company, for
a cash consideration of £42 million (Sh5.3 billion) on a cash free debt
free basis, payable upon completion.”
“After
assessing all options, we believe that exiting the end to end identity
solutions market is the right one for the Group and will deliver the
most value to shareholders. Focusing on the identity-related security
features and components is in line with our strategy to transform De La
Rue to an asset light and more technology-led business. This transaction
strengthens our balance sheet and allows us to focus on the other
strategic growth areas of Security Features, Polymer, and PA&T,” De
La Rue’s CEO, Martin Sutherland, had said back in June.
In
the statement, CAK says the approval was granted on sound reasoning
that both De La Rue Kenya and HID activities’ overlap in the provision
of electronic secure printing solutions, that both firms offer their
services within Kenya and therefore the relevant geographic market for
the transaction is national, and that post-merger, the new entity will
have a market share of less than 15 per cent in each of the markets for
supply of e-passports, e-ID and e-Government identity solutions and thus
the merge will unlikely to raise competition concerns.
“Further,
it is the Authority’s view that the merged entity will continue facing
competition from other global participants in the market for provision
of electronic secure printing solution,” CAK said.
CAK
also said it had obtained an undertaking from the two entities that no
employees will be affected negatively by the transaction.
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