AFRICA BULLETIN

Kenya: Changes in Merger Control

By Lerisha Naidu, Partner and  Sphesihle Nxumalo, Associate, Competition and Antitrust Practice, Baker McKenzie Johannesburg


In November 2019, Kenya introduced The Competition Rules, 2019 (Rules) to govern the Competition Authority of Kenya’s (CAK) functions under the Competition Act No 12 of 2010. Some of the key changes in relation to merger control are set out below.

Merger thresholds

Notifiable mergers

A merger must now meet any of the following thresholds to be mandatorily notifiable to the CAK:

Excluded transactions requiring approval of the CAK

Mergers that meet any of the following thresholds may be considered for exclusion from notification, but an application for exclusion and approval of the application by the CAK is required prior to implementation of the transaction:

Excluded transactions not requiring approval of the CAK

Mergers that meet any of the following thresholds will be excluded from notification altogether:

Having said that, the CAK may require parties to an excluded transaction to notify such excluded transactions, even if it falls below the exclusion thresholds set out above, where it is likely that the transaction will substantially prevent or lessen competition, restrict trade or raise public interest concerns. In such situations, parties to the merger may seek an advisory opinion from the CAK on whether the transaction requires notification or not.

Merger Filing Fees

The merger filing fees have also been changed. The merger filing fees now payable for merger notifications in Kenya are reflected below:

MERGER FILING FEES
Threshold (Combined value of
assets/turnover)
Fee
KES 0 – KES 500 million Nil
KES 500 million and one – KES 1 billion Nil
KES 1 billion and one – KES 10 billion KES 1 million
KES 10 billion and one – KES 50 billion KES 2 million
≥ KES 50 billion KES 4 million


Domestic Kenya Filing versus Regional COMESA filing

Historically, the CAK insisted on domestic merger filings even where a merger met the COMESA regional dimension thresholds and a merger filing had been submitted to the COMESA Commission. However, in terms of the Rules, where a merger meets the COMESA regional dimension merger thresholds, undertakings shall merely inform the CAK in writing that a transaction has been notified to the COMESA Commission within 14 days of filing the notification to the COMESA Commission.

Abandonment of a merger

In terms of the Rules, parties to a notified merger shall be deemed to have abandoned the merger if they fail to respond to the CAK’s request for additional information within 21 days from the date of request. Of course, parties may also formally withdraw a merger in writing to the CAK. The filing fee paid to the CAK would not be refunded in such a situation.

Mergers implemented without the CAK’s approval

The Rules set out the factors that the CAK will take into account in determining whether a merger has been implemented without the CAK’s authority. In particular, the CAK will consider whether:

What remains to be seen is the manner in which these amendments will be interpreted and implemented in practice by the CAK.

 

 

 

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