Whose Interest Is It Anyway? CAK Stresses ‘Public Interest’ in Merger Control

By: Joshua Eveleigh (African Antitrust)

On January 5th, 2024, the Competition Authority of Kenya (CAK) granted approval for Nava Apparels L.L.C-FZ to acquire the assets of Mombasa Apparel (EPZ) and Ashton Apparel (EPZ), under the condition that Nava retains all 7019 employees of EPZ on terms at least as favorable as their current employment terms.

Following the transaction, the combined entity would hold a negligible market share of only 3.83% in the export-oriented clothing apparel market. Consequently, it would continue to face significant competition from various other market participants post-transaction. In light of this, the CAK determined that the transaction would not result in any significant reduction or prevention of competition in the relevant market.

Similar to South Africa’s merger control framework, the CAK is required to conduct a public interest assessment alongside the traditional competition evaluation during its merger review process. This assessment includes considerations such as the preservation and advancement of employment opportunities, the capacity for small and medium-sized enterprises (SMEs) to enter and compete in the market, and the ability of domestic industries to compete globally. If the CAK identifies credible concerns regarding the public interest implications of a proposed transaction, it reserves the right to block said transaction.

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