Kuramo's 74pc buyout of Trans-Century approved by COMESA Commission

Source: Capital FM Kenya
Author: Amukohe Yvonne

NAIROBI, Kenya, Mar 26 - The proposed merger between Kuramo Africa Opportunity Kenyan Vehicle Ltd (KAOKV) and Trans-Century PLC has been approved by the COMESA Commission.

The proposed transaction involves KAOKV increasing its shareholding in the target company to around 74 percent.

The Competition Assessment focused on relevant market sector investments by KAOKV, such as the manufacture of electrical equipment, after-sales services for transformers, and engineering services, among others, which showed that the acquirer did not operate in the relevant markets pre-merger.

According to the 105 Meeting of the COMESA's Committee responsible for initial determinations regarding the merger, since KAOKV did not operate in these markets before the amalgamation, there would be no change in market structure or competition concerns.

The Commission's Guidelines on Market Definition state that a 'relevant product market comprises all those products and/or services which are regarded as interchangeable or substitutable by the consumer/customer, by reason of the products characteristics, their prices and their intended use'.

The aim was to help Trans-Century settle debt and secure working capital for itself and subsidiaries, aligning with its recovery and growth strategy.

Additionally, the transaction wouldn't result in coordinated effects due to the absence of overlap in activities.

Third-party views from national competition authorities in the DRC, Kenya, Malawi, and Mauritius were considered, with no raised concerns.

Consequently, the Committee determined that the merger would not substantially prevent or lessen competition in the Common Market, nor would it be against public interest or negatively impact trade between Member States.