KENYA Law and Practice Contributed by: Sammy Ndolo, Njeri Wagacha and Brian Muchiri, Cliffe Dekker Hofmeyr (Kieti Law LLP)
Competition The Competition Authority of Kenya (CAK) is responsi - ble for ensuring compliance with competition laws. In this regard, the CAK analyses and approves transac - tions resulting in the change of control of a business, part of a business or an asset of a business in Kenya and that meet the merger thresholds prescribed by CAK. Mergers and acquisitions that have a regional aspect may need approval from other regional authorities. If a transaction involves a party that operates in multi - ple member states of the Common Market for East - ern and Southern Africa (COMESA), and the merging companies’ turnover/asset value meets COMESA’s set thresholds, then the transaction may require approval from the COMESA Competition and Con - sumer Commission (CCCC). Effective 1 November 2025, transactions that involve parties operating in multiple member states of the East African Community (EAC) require approval from the EAC Competition Authority, (EACCA). In this regard, the EACCA and the CAK entered into a bilat - eral agreement in May 2023 to streamline their merger notification guidelines and implement an information- sharing framework for cross-border infractions. The EACCA set the following thresholds over cross-border mergers: • the higher of the combined turnover or asset value of the parties in EAC is at least USD35 million; and • at least two parties involved in the transaction have a combined turnover or assets value of USD20 mil - lion within EAC, unless each of the parties achieves at least two-thirds of its aggregate turnover or assets in EAC within one and the same member state. The EACCA has also entered into a memorandum of understanding with the Fair Competition Commission of Tanzania and the Rwanda Inspectorate, Competi - tion and Consumer Protection Authority to facilitate co-operation and co-ordination in the application and enforcement of their competition laws.
Sector-Specific Regulators In addition, M&A transactions will be subject to addi - tional regulation from sector-specific regulators, especially if the sector-specific laws have provisions regarding ownership and control changes. For exam - ple, the purchase of a bank, digital credit provider, microfinance bank, and other regulated financial insti - tutions will need approval from the Central Bank of Kenya (CBK), while buying significant rights in an avia - tion company will require clearance from the Kenya Civil Aviation Authority. Similarly, M&A transactions in the communication, insurance and energy sectors would require the approval of the Communications Authority of Kenya (CA), the Insurance Regulatory Authority (IRA) and the Energy and Petroleum Regulatory Authority (EPRA) respectively. In addition, sectors such as betting and gaming, export processing zone business services, and tourism require notification to their respective regulators. It is useful to note that the approvals from the reg - ulators are not exclusive of each other and that an acquirer may be required to obtain multiple approvals for an M&A transaction. 2.3 Restrictions on Foreign Investments Restrictions on foreign investments tend to be sector- specific. Examples include the following. • In the banking industry, no individual or entity other than licensed financial institutions, the Kenyan gov - ernment, foreign governments, state corporations, foreign companies licensed as financial institutions in their respective countries, or non-operating hold - ing companies approved by the CBK, may hold more than 25% of the share capital of a Kenyan bank. As a result, no investor (including foreign investors) can acquire more that 25% of the share capital of a Kenyan bank unless they are exempt from the above restrictions. • In the insurance industry, at least 33.33% of the controlling interest (whether in terms of shares, paid up share capital or voting rights) in an insurer must be owned by citizens of a partner state of the EAC, a partnership whose partners are all citizens of an EAC partner state, or a corporation whose
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