The Competition Authority of Kenya (CAK) has approved the proposed acquisition of 51% shareholding in Monarch Insurance Company Limited by a consortium of three firms, Ondoba Limited, Kenyoro Limited and Equico Thirteen Limited.
Ondoba Limited (Ondoba), the 1st acquiring undertaking, is a new holding company incorporated for the sole purpose of investing in the financial sector.
Kenyoro Limited (Kenyoro), the 2nd acquiring undertaking, is a limited liability company incorporated in Kenya.
Kenyoro undertakes investment activities in the financial sector. Equico Thirteen Limited (Equico), the 3rd acquiring undertaking, is a limited liability company incorporated in Kenya.
It invests in the financial services sector, including the insurance industry.
“The transaction therefore, qualified as a merger within the meaning of section 2 and 41 of the Competition Act Cap. 504.
“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 CAK statement.
Further, CAK noted that parties whose combined turnover or assets, whichever is higher, is over Ksh1 billion are required to seek approval from the Authority prior to implementing a proposed merger.
“The transaction between Ondoba/Kenyoro/Equico and Monarch met this threshold for mandatory notification and full analysis under the Competition (General) Rules, 2019,” CAK noted.
On the other hand, Monarch Insurance Company Limited (Monarch), the target undertaking, is a limited liability company incorporated in Kenya.
It provides composite insurance products, including general insurance, motor solutions, and life insurance.
According to the parties, the rationale for the transaction is business growth and expansion by enhancing operational efficiencies and executing a strategy driven by partnerships from the new shareholders.
