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Struggling firms should think about mergers and acquisitions

President Williiam Ruto during lthe signing of seven parliamentary Bills that will accelerate the achievement of our Bottom-Up Economic Transformation Agenda. It will also enhance Kenya's global competitiveness.[PCS]

Mergers and acquisitions (M&A) are gaining traction in Kenya as businesses look for strategic ways to navigate financial pressures and unlock growth opportunities. M&A activity has seen a notable upsurge over the past two years, marking a strong rebound from the slowdown caused by the Covid-19 pandemic. Meanwhile, the World Bank forecasts a 5.2 per cent economic growth rate for Kenya between 2024 and 2026, driven largely by a strengthening private sector and rising business confidence.

This move has not only prevented premature liquidations but also propped up M&A as a viable business rescue strategy for Kenyan businesses in the same position. While still relatively under-utilised, M&A offers a structured path for companies to restructure debt, preserve operations, and protect stakeholder interests. It prevents catastrophic liquidations and props up M&A as a viable business rescue strategy. But for an M&A deal to function as a rescue strategy, compliance with Kenya's legal framework is essential.

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