In November 2019, Kenya introduced The Competition Rules, 2019 to govern the Competition Authority of Kenya’s 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:
- the undertakings have a minimum combined turnover or assets (whichever is higher) in Kenya of KES 1 billion and the turnover or assets (whichever is higher) in Kenya of the target undertaking is above KES 500 million
- the turnover or assets (whichever is higher) in Kenya of the acquiring undertaking is above KES 10 billion and the merging parties are in the same market or can be vertically integrated (unless the transaction meets the COMESA Competition Commission (COMESA Commission) Merger Notification Thresholds
- 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 exceed KES 10 billion
- where the undertakings operate in the COMESA region, if the combined turnover or assets (whichever is higher) of the merging parties does not exceed KES 500 million and two-thirds or more of their turnover or assets (whichever is higher) is generated or located in Kenya
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:
- the combined turnover or assets (whichever is higher) in Kenya of the merging parties is between KES 500 million and KES 1 billion
- if the firms are engaged in prospecting in the carbon-based mineral sector, irrespective of asset value
Excluded transactions not requiring approval of the CAK
Mergers that meet any of the following thresholds will be excluded from notification altogether:
- the combined turnover or assets (whichever is higher) in Kenya of the merging parties does not exceed KES 500 million
- the merger meets the COMESA Commission Merger Notification Thresholds and at least two-thirds of the turnover or assets (whichever is higher) is not generated or located in Kenya
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.