Category: Kenya

COMESA receives first global merger notification

Posted on by andreasstargard

COMESA old flag color
Once more, big news out of southern Africa. According to a notice published on COMESA’s web site, the Competition Commission (“CCC”) has received its first merger filing. And it is not merely any old filing — rather, two large global consumer electronics players, Philips and Funai, are the parties to this virginal transaction being notified to the CCC. As the notice points out in its aptly-named (yet somehow almost ‘cute’, if there is such a thing as cute in competition law) title, it constitutes “Merger notice no. 1”.

With the CCC numbering these filings sequentially (based on all appearances), one can’t help but wonder how many more of these notices will we see in the near future? Will the number reach 2 or 3 digits in the first year of operation of this young competition watchdog? After all, as we pointed out previously on this blog, the scope and reach of the (suspensory!) COMESA merger regime are extremely broad and would presumably cover hundreds of transactions similar to the now-notified first deal…

As background to the transaction, neither party apparently operates on its own in the COMESA jurisdictional countries. They merely have sales via distributors and remote agents. An article in the Kenyan paper “Daily Nation” mentions that the parties had announced in January (right around the time that COMESA’s CCC became operational) that Philips would be selling its remaining audiovisual business to Funai as part of a changing business strategy.

Here’s the upshot for antitrust lawyers and parties to future transactions with a potential impact in any of the COMESA member states: the mere fact of this notification legitimizes the entire COMESA regime. This is all the more true, as the parties are two global and important players, with presumptively excellent legal competition counsel (who must have advised that a filing with the CCC would be required, if not advantageous).

My take: The fact that this rather important (and moreover rather remote, for COMESA jurisdictional purposes!) deal constitutes “Merger notice no. 1” is an absolute stroke of luck for the CCC. It lends serious credibility to its legitimacy.

Competition Authority of Kenya wrests right to control M&A from COMESA.

Posted on by andreasstargard

(See also our prior reporting here: https://africanantitrust.com/2013/01/31/kenyan-competition-authoritys-comesa-jurisdiction-questions/)

COMESA old flag colorkenya
The Competition Authority of Kenya (“CAK”) has won the first round in its apparent jurisdictional battle against COMESA to control acquisition of shares, interest or assets among local firms, ending two months of uncertainty as to who the regulatory authority was for dealmakers. Kenyan Attorney General Githu Muigai has given the CAK the authority to act as the sole agency with the mandate to administer and clear local Kenyan mergers and acquisitions.

This power purports to shield, at least temporarily, local firms from the COMESA competition laws. Under the multi-state competition regime, firms engaging in certain mergers and acquisitions with an effect in two or more member states are required to seek clearance from COMESA’s Competition Commission, a process that comes with significant costs and time delays not expected to the same extent with the CAK procedure.