KENYA Law and Practice Contributed by: Sammy Ndolo, Njeri Wagacha, Brian Muchiri and Deborah Sese, Cliffe Dekker Hofmeyr
3. Regulatory Framework 3.1 Primary Regulators and Regulatory Issues Key Regulators and Regulatory Issues Relevant to Private Equity Funds and Transactions Merger control The Competition Authority of Kenya (CAK) is respon - sible for ensuring merger control and antitrust compli - ance. In this regard, the CAK analyses and approves transactions with respect to the prescribed thresholds involving an acquisition of shares, business or other assets, whether inside or outside Kenya, resulting in a change of control of a business, part of a business or an asset of a business in Kenya. The CAK has set specific thresholds for merger trans - actions that are: • always subject to notification; • potentially excluded from notification; or • excluded from notification. Transactions always subject to notification include: • those with a minimum combined turnover or asset value (whichever is higher) in Kenya of KES1 billion, and where the turnover or assets (whichever is higher) of the target firm is above KES500 million; • those where the turnover or value of the assets (whichever is higher) of the acquiring firm is above KES10 billion and the merging parties are in the same market, or can be vertically integrated, unless the transaction meets the CCC merger noti - fication thresholds; • those in the carbon-based mineral sector if the value of the reserves, the rights and the associated assets to be held as a result of the merger exceeds KES10 billion; and • those where the firms operate in COMESA, the combined turnover or value of the assets (which - ever is higher) does not exceed KES500 million and two-thirds or more of the turnover or assets (whichever is higher) is generated or located in Kenya.
Transactions potentially excluded from notification include: • those where the combined turnover or value of the assets (whichever is higher) is between KES500 million and KES1 billion; and • those where, irrespective of the asset value, the firms are engaged in prospecting in the carbon- based mineral sector. Transactions excluded from notification include those where: • the combined turnover or value of the assets (whichever is higher) does not exceed KES500 mil - lion; • the merger meets the COMESA merger notification thresholds, and at least two-thirds of the turnover or assets (whichever is higher) are generated or located outside of Kenya; • the merger takes place wholly or entirely outside of Kenya and has no local nexus; or • the merger involves a holding company and its subsidiary wholly owned by undertakings belong - ing to the same group, or amalgamations involving subsidiaries wholly owned by undertakings belong - ing to the same group. Transactions that have a regional impact may also need approval from various regional authorities. If a transaction involves a party that operates in mul - tiple member states of COMESA, and the merging company’s turnover/asset value meets the following thresholds, the transaction may require approval from the CCC: • the combined annual turnover or value of the assets (whichever is higher) in the common market of all parties to a merger equals or exceeds USD50 million; and • the annual turnover or value of the assets (which - ever is higher) in the common market of each of at least two of the parties to a merger equals or exceeds USD10 million, unless each of the par - ties achieves at least two-thirds of its aggregate turnover or assets in the common market within the same member state.
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