South Africa-based integrator of advanced network and cloud computing services Echotel International Proprietary Limited has received the green light from the Competition Authority of Kenya (CAK) to acquire 80 percent of iWayAfrica Kenya.
Echotel, through its subsidiaries, provides wireless connectivity services while the target provides retail internet access, Virtual Private Network (VPN), and online security services.
Locally, the multinational resells Internet connectivity, VPN and online security services. It provides services via a multi-carrier converged network, to simplify the complexity of aggregating infrastructure to clients.
iWayAfrica Kenya (iWayKenya), provides fixed line services as well as a range of ICT services including wireless internet connectivity services, data storage, support and maintenance services, among others.
The regulator stated that the proposed transaction qualifies as a merger within the meaning of Section 2 and 41 of the Competition Act No.12 of 2010 as it would not affect competition negatively.
From the foregoing, it is the Authority’s view that the proposed transaction is unlikely to lead to substantial lessening of competition or prevent competition in the market for provision of VPN services,” CAK said.
“The parties’ combined turnover for the preceding year was over Sh1 billion and, therefore, the transaction met the threshold for full merger analysis as provided in the Merger Threshold Guidelines,” stated the regulator.
Following the deal, the merged entity is now estimated to have a market share of 1.8 percent in internet access services according to research firm Delta Partners and merged market share of 0.22 percent in the provision of VPN.