KCB Group Plc has completed the acquisition of DRC-based Trust Merchant Bank (TMB) and now owns an 85% stake in the bank that is estimated to have an 11% share of the Democratic Republic of Congo banking sector, after obtaining all regulatory approvals.
KCB will offer banking, insurance and trade finance services using TMB’s brand, 109 branches and customer relationships built over its 18 years. In 2021, the Banker named (Trust Merchant Bank) as the “Bank of the Year” in the DRC.
Various merger/acquisition (M&A) deals in the last few months in East Africa since the last update.
(1 US dollar equals 110 Kenya shillings)
Banking and Finance: Finance, Law, & Insurance M&A
Kenyan Banks
Regional Banks
Investment Markets and Deal Makers
Insurance
Remittances
Other
Agri-Business, Food & Beverage M&A
Logistics, Engineering, Manufacturing & Agri-Biz M&A
Airline/ Oil/Energy/Mining M&A
Education, Tourism, Real Estate & Supermarkets M&A
Telecommunications, Education, Media & Publishing M&A
Health and Medical, Pharmaceutical M&A
Other Notes
This week marked the deadline for bids for two new Ethiopia telecommunication licenses on April 26. Two offers were received in Addis Ababa; one by MTN (Mauritius) and the other for a “Global Partnership for Ethiopia”, a consortium by Vodafone, Vodacom, Sumitomo and Safaricom.
This is part of an overdue privatization push by Ethiopia that has continued even as political tensions have flared up in different parts of the country. The licenses do not include mobile money, but that is something that currently monopoly, Ethio Telecom has been granted and hopes to launch soon. It is expected that others who did not bid for mobile licenses such as Orange may bid for the partial privatization of Ethio Telecom which has 50 million subscribers.
Can Safaricom grow in this market 110 million population strong-market? That has been a goal of Safaricom’s management for the last few years. But a January 2021 report by Citi Bank was negative on the “high risk, high return” venture which will impact Safaricom’s earnings in the short to medium term. This was due to the impact of Covid-19 on the risk profile of all potential investors in Ethiopia, but also as, by taking a controlling stake in the consortium, the Ethiopia operations will be consolidated in Safaricom’s financials. Citi expects that Safaricom would raise half a billion dollars of debt to contribute to the consortium which would put an end to special dividends paid by the firm.
After technical and financial evaluations of the two qualified bids, a decision is expected by mid-May 2021.
Also, see more about MTN, from their Nigeria listing.
EDIT May 24, 2021:
EDIT May 25, 2021:
EDIT June 8, 2021:
EDIT July 5, 2021
EDIT July 15: The Ethiopian Communications Authority (ECA) issued a fifteen-year telecommunications operator license to “Safaricom Ethiopia PLC,” a newly incorporated local company.
EDIT: October 6 2022: Safaricom Ethiopia launched its mobile telecommunications network and services in Addis Ababa, Ethiopia, with 2G, 3G and 4G mobile services in 11 towns. While it builds a network to span 25 towns by April 2023, it also has infrastructure sharing and interconnection agreements with Ethio Telecom.
Also comes with a mobile money license for M-Pesa:
Continues
Since the last update of deals in the East Africa region, we are six months into the era of Coronavirus and its effects across the world.
Merger and acquisition (M&A) deal are still happening, with some older ones having been in the pipeline for months before. The impact of the pandemic has also created some new M&A deals and partnerships, while reducing the value of others, and even killing off some earlier-announced merger deals, in scenarios that had all been foreseen by deal-makers.
Here are some notable deals (1 US dollar equals 108 Kenya shillings)
Airline/ Oil/Energy/Mining M&A
Banking and Finance: Finance, Law, & Insurance M&A
Kenyan Banks
Investment Markets and Deal Makers
Insurance
Regional Banks
Remittances
Agri-Business, Food & Beverage M&A
Health and Medical, Pharmaceutical M&A
Logistics, Engineering, & Manufacturing M&A
Real Estate, Tourism, & Supermarkets M&A
Telecommunications, Media & Publishing M&A
Other M&A
The Covid-19 pandemic has occasioned an unprecedented humanitarian and economic crisis across the World whose impact will be felt for quite some time.
All stakeholders, including Governments, regulators and other State agencies, have to implement their mandates to ensure that markets remain open, functioning, and competitive. They also need to develop and implement policies that ensure the impact of this crisis is short-lived, while also mitigating its effects.
Recently, heads of Competition agencies across Africa congregated virtually under the auspices of the African Competition Forum (ACF) to deliberate on how we can prepare ourselves for an uncertain future. The meeting also recognized the critical role competition agencies play in ensuring that markets continue functioning competitively.
Competition agencies have in recent weeks attended to infractions like price gouging, abuse of dominance, cartelization, and abuse of buyer power. The purpose of such conduct is private gain at the expense of consumer welfare and, in the current emergency, is antagonistic to containment efforts.
In order to continue playing their role in the post-pandemic era, it was noted that Competition agencies should reconfigure their operations from at least four perspectives; organizational, regulatory capacity, enforcement priorities, and policy advisory role.
Competition agencies should be prepared to work with limited resources due to decreased Government revenues, even as demand for their mandates expand. As a matter of priority, agencies should review their strategic objectives and refocus their interventions in favour of fewer but highly impactful activities.
They should also enhance collaboration and cooperation with regional Competition agencies and, nationally, with respective sector regulators.
Competition agencies should also entrench a culture of Enterprise Risk Management (ERM) and Business Continuity Management (BCM). At the Competition Authority of Kenya, implementation of ERM and BCM, coupled with the digitization of our core mandate processes in mid-2019, is enabling the organization to weather this storm with minimal disruption to service delivery.
However, automation begets risks such as cyber-attacks and breach of client confidentiality and therefore specific measures should be taken to insulate an automated organization.
From a regulatory perspective, it is critical that agencies review their laws to ensure that they are results-oriented, while at the same time flexible to deal with emergencies. The Competition Act No.12 of 2010 has enabled the Authority to attend to supply chain and consumer protection challenges.
Agencies should also align their interventions with the country’s industrial policy. For instance, Competition agencies need to think about how they can ‘lower their guns’, albeit momentarily, to support a certain threshold in the growth of our Nation’s industrial capacity.
Competition agencies are likely to experience an upsurge in joint venture applications and distress mergers, more so from the airline industry. It is also expected there will increased merger activity in the online and e-commerce space.
On the flipside, killer mergers could also increase where dominant incumbents seek to acquire upcoming competitors, more so in the digital economy which has become indispensable in the pandemic. Towards this, the Authority has realigned its workforce to enable critical review of all merger applications, but within the law.
Further, the Authority is finalizing investigations in the retail sector regarding allegations of a few supermarkets failing to pay their suppliers on time, which is against abuse of buyer power provisions under the Competition Act. Unfettered supply of essential commodities to consumers is paramount during a pandemic.
Lastly, the Covid-19 pandemic has seen some countries revert to price controls. As competition agencies, we need to advise our governments that price controls are counterproductive since they ultimately harm consumers, more so by facilitating the proliferation of black markets. Quality and the safety of goods is also not guaranteed.
Fortunately, the Kenyan government has attended to the market distortions during this pandemic through the forces of supply and demand. Specifically, the Government has ensured that essential supplies in the market are available.
Regulators should not strive to go back to the pre-Covid-19 dispensation, in terms of how we organize and manage our agencies, but instead, let us embrace the new normal way of doing things that is far from normal.
Mr. Wang’ombe Kariuki is the Director-General, at the Competition Authority of Kenya. He is on Twitter at @wang_kariuki.