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COMPETITION ALERT

THE COMPETITION ACT, NO. 12 OF 2010

18th July, 2014

1. Background
Section 42 (2) of the Competition Act, No. 12 of 2010 (the “Act”) requires parties to an acquisition
transaction to seek the approval of the Competition Authority of Kenya (“CAK”) prior to
implementing a transaction which would result in a change of control of an undertaking or business.

Under Section 78(3) of the Act, CAK is empowered to make rules prescribing filing fees and other
fees to be paid by persons in connection with its procedures.

2. Introduction of Merger Filing Fees


In furtherance of the above provisions, the CAK has, through Kenya Gazette Notice No. 4567
(published on 4th July 2014), introduced filing fees for proposed mergers as follows:-

Threshold (Ksh.) Fees per proposed merger (Ksh.)


5 Million – 1 Billion 500,000.00
1Billion – 50 Billion 1,000,000.00
50 Billion and above 2,000,000.00

The above filing fees will take effect from 1st August 2014. Accordingly, all applications for approval
of mergers (which fall within the above thresholds) filed after 1st August 2014 shall require proof of
payment of the applicable fees.

3. Comment
We have noted that the Gazette Notice is unclear on whether the prescribed thresholds relate to assets
or turnover and, in either case, whether it is the combined total of the merging entities in Kenya or
otherwise. We consulted the Mergers and Acquisition Division of the CAK which indicated that the
applicable threshold for purposes of the merger filing fees is the combined turnover or assets of the
merging entities in Kenya whichever is higher, based on the audited accounts of the relevant entities
for the preceding year.

This alert is intended to provide general information and should not be used as a basis for ascertaining a course of action
without appropriate professional advice. If you need any further information and/or clarification please contact William
Maema, (wmaema@ikm.co.ke) David Lekerai (dlekerai@ikm.co.ke) or Imelda Anika (ianika@ikm.co.ke) of our
Corporate Commercial Department.

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