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Regulator gives nod to sale of De La Rue subsidiary

BUSINESS
By Frankline Sunday | September 5th 2019

The Competition Authority of Kenya has approved the acquisition of De La Rue Kenya Ltd by HID Corporation Ltd (HCL).

The deal will see HCL acquire the entire business of De La Rue Kenya, a subsidiary of currency printing firm De La Rue Plc, in which the Government has a 40 per cent shareholding.

“De La Rue Plc has another subsidiary in Kenya - De La Rue Kenya EPZ Ltd (DLR), a 60/40 joint venture, owned by De La Rue PLC and the National Treasury respectively,” explained the CAK in a statement.

The regulator, however, notes that DLR is not part of the proposed transaction and will continue with its ownership and currency printing operations in the country. Both Dela Rue Kenya and HCL provide passports and identity card printing solutions. The value of the deal has not been revealed.

“Post-merger, the merged entity will have market shares of less than 15 per cent in each of the markets for supply of e-passports, e-ID and e-Government identity solutions,” said CAK.

“The transaction is, therefore, unlikely to raise competition concerns.”

The merger is, however, subject to approval on condition that Dela Rue Kenya Ltd fulfills the contracts it has entered with the Government.

Last month, Trade and Industrialisation Cabinet Secretary Peter Munya allowed the De La Rue’s subsidiary operating under the export processing zone to produce fully for the local market.

The move was aimed at easing the supply of the new generation banknotes.

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