The Competition Authority of Kenya (CAK) has fined the entity formed by the acquisition of LSF11 Skyscraper Holdco S.a.r.l (MBCC Group) by Swiss multinational Sika International KSh 17,492,795.23 for contravening the Competition Act.
- The transaction, which was of a global nature, involved Sika International AG acquiring LSF11 Skyscrapper Holdco S.a.r.l. (MBCC Group) and indirect control of Master Builders Solutions Kenya Ltd.
- Locally, the merger was implemented in May 2023 following the closure of the global transaction.
- In October 2023, the parties self-reported that the merger in Kenya was implemented following the close of the global deal.
Sika AG is a Swiss multinational with a presence in over 100 countries and operates more than 400 factories worldwide. It is a specialty chemicals company that manufactures products for the building and motor vehicle sectors, which are used for reinforcing, dating, bonding, and other purposes.
“The Competition Act provides that any person who implements a merger without approval commits an offense and shall be liable on conviction to imprisonment for a term not exceeding five years or to a fine not exceeding ten million shillings, or both,” said CAK.
“In the alternative, the Authority may impose a financial penalty in an amount not exceeding ten percent of the preceding year’s gross annual turnover in Kenya of the undertaking or undertakings in question.”
In a statement, the Authority said it took note that the parties proactively reported the nonconformance, furnished it with all information regarding the acquisition, and cooperated to reach a settlement on the matter.
Upon payment of the penalty, the parties filed a merger application with the Authority and the transaction was excluded from full analysis and approved. The regulator said it considered cooperation and foreign direct investment resulting in job retention and improved consumer choice from the deal.
Before it was acquired by Sika and private equity firm CINVEN, MBCC Group was a leader in products and solutions for construction markets. The merger was valued at nearly $6bn.
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