The Competition Authority of Kenya (CAK) has approved the acquisition of a gold mining company by another firm which is a subsidiary of an organisation in Dubai.
In a statement issued on Thursday, May 2, the authority explained that the acquisition of 100 per cent of the company's shares had met the necessary criteria and would not have a negative impact on the Kenyan market.
Some of the factors the Authority was looking into concerning the merger were the impact on competitors of SMEs, the impact on particular industries/sectors, the impact on job opportunities and the impact on the ability of national industries to compete in international markets.
"As per the parties's submissions, this transaction will not elicit negative public interest concerns. Specifically, there will be no employment loss post-merger," read part of the statement.
The acquired company was involved in gold mining in the country. CAK noted that the company had mining licenses in the western Kenya region.
It operated two gold mines in Tanzania and one in Kenya which are believed to be among Africa's highest-grading gold assets.
Additionally, CAK explained that the turnover of both companies was over Ksh1 billion which is a requirement to allow merging.
"The transaction qualified as a merger within the meaning of Sections 2 and 41 of the Competition Act. The Act stipulates that a merger, or takeover, may occur when an undertaking directly or indirectly acquires control over another business within Kenya. This may happen through, among others, purchase/lease of shares, exchange of shares, vertical integration," read part of the statement.
The transaction also met the threshold outlined in the Competition (General) Rules, 2019 which calls for mandatory notification and full analysis.
Notably, this merger was announced in late 2023, when the Dubai-based company explained that the move came as the overall value of companies that trade gold stocks on the stock market has gone down.
The directors and shareholders of the acquired company earlier voted in favour of the deal which was an all-cash offer.
"It provides an exit opportunity in cash for all shareholders taking into account the current gold prices as well as the operation and other risks inherent in the business," the company added.
