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Kenya

Capital from mergers, acquisitions hit Sh12b in 2015

Manufacturing was the leading sector at 16 percent followed by the financial sector at 9 percent/FILE

Manufacturing was the leading sector at 16 percent followed by the financial sector at 9 percent/FILE

NAIVASHA, Kenya, May 30 – Direct capital from mergers and acquisitions in Kenya hit Sh12 billion in 2015.

This is according to Raphael Mburu, the Mergers and Acquisitions Analyst at the Competition Authority of Kenya who says there were 35 mergers in the period under review.
Manufacturing was the leading sector at 16 percent followed by the financial sector at 9 percent.

Investment was at 7 percent followed by the telecommunication sector at 4 percent.

“This is just direct capital that came to the country, we haven’t checked on the ripple effect on lawyer fees, transactions advisors fees among others; the number could be bigger,” Mburu said during a journalists’ training in Naivasha.
He said that 51 percent of the mergers were local firms while 49 percent had an international dimension.

Among the notable mergers in the period include Coca-Cola Company and SABMiller who merged to form Coca Cola Beverages Africa (CCBA).

During the period, Catalyst Principal acquired 25 percent of Stellar Investments but with control in terms of power to approve the annual business plan, any changes to service agreements and appointment and removal of directors.

Another notable merger was between Old Mutual and UAP insurance where Old Mutual acquired a controlling stake in UAP.

Mburu said competition issues in Joint Ventures and Investment Fund have been challenging to regulate due to their complexity.

“For a joint venture to be a merger it must be full function operating for a long period with all the function of an autonomous economic entity, however, joint ventures have purposefully finite period talking over one specific function,” he explained.

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