KENYA Law and Practice Contributed by: Sammy Ndolo, Njeri Wagacha and Brian Muchiri, Cliffe Dekker Hofmeyr (Kieti Law LLP)
Cliffe Dekker Hofmeyr (Kieti Law LLP) Merchant Square 3rd Floor Block D Riverside Drive Nairobi Kenya Tel: +254 732 086 649 Email: cdhkenya@cdhlegal.com Web: www.cliffedekkerhofmeyr.com/en/
1. Trends 1.1 M&A Market
A notable feature of the year was the counter-cyclical role of Development Finance Institutions (DFIs), which sustained deal flow as private equity deployment slowed . DFIs increasingly partnered with commercial investors through blended finance and risk-mitigated structures, supporting transactions across energy, agribusiness, financial services, and infrastructure. Venture capital and minority investments continued to outpace traditional M&A by volume, particularly in technology-enabled businesses. I&M Burbidge Capi - tal’s tracking shows that venture and growth invest - ments formed a significant proportion of disclosed transactions, even as overall M&A volumes declined. Increased deal structuring sophistication has emerged, with a rise in partial acquisitions, minority investments with enhanced governance rights, deferred consid - eration, and earn-out mechanisms to bridge valuation gaps in uncertain macroeconomic conditions. Greater regulatory and due diligence scrutiny has shaped deal execution. Investors are spending more time assessing competition law, sector-specific regu - lation, tax exposure, and governance issues, leading to longer completion timelines but more robust trans - action structures. Finally, capital deployment has become more value- driven, with investors prioritising businesses demon - strating strong cash flows, defensible market posi - tions, and clear paths to profitability, as opposed to speculative or early-stage growth plays.
Kenya’s M&A and private capital market in 2025 was defined by greater selectivity and higher-value trans - actions. While overall activity moderated, aggregate disclosed deal values increased, reflecting a pivot toward strategic acquisitions and structured invest - ments. Investors prioritised assets with clear cash flows, defensible market positions, and scale poten - tial. According to DealMakers, this mirrors a broader Afri - can slowdown, with deal value (excluding South Afri - ca) down about 6% year-on-year to USD6.85 billion and deal numbers falling from 285 to 259. Despite this, Kenya remained the most active market in East Africa, recording 37 transactions in the first nine months of 2025, though at a slower pace and with a modest disclosed deal value of approximately USD205 million. 1.2 Key Trends Kenya witnessed fewer M&A deals overall, but the ones that did materialise were often strategic and sec - tor-focused transactions. According to DealMakers , across the continent, there were massive corrections in technology and fintech valuations and a redirection of attention to opportunities in healthcare, agriculture, food value chains and logistics. Kenya remains the primary transaction hub in East Africa, recording the highest number of deals year- to-date and anchoring regional cross-border activity.
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