The Competition Authority of Kenya (CAK) has sanctioned the 80 per cent stake acquisition of iWay Africa Kenya by South African based cloud computing company Echotel International Proprietary Limited.
According to a news report by the Business Daily, the watchdog gave the green light for the acquisition because it meets the requirements of a merger as stipulated under the Competition Act of 2010. As such, the new entity that will spring up from the unification of the two firms will 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 is quoted as saying by the Business Daily.
“The parties’ combined turnover for the preceding year was over Ksh1 billion and therefore, the transaction met the threshold for full merger analysis as provided in the Merger Threshold Guidelines,” the regulator added.
The Business Daily similarly reports that the merged entity is now estimated to have a market share of 1.8 percent in internet access services and merged market share of 0.22 percent in the provision of VPN.
Echotel or Echo is an independent integrator of advanced network and cloud computing services which offers an aggregation of ISP (Internet Service Provider) services to the South African market. Through a collaboration of multiple ISPs and vendors the company takes an independent approach to sourcing, building and managing converged communication networks which allow it to deliver solutions that are best of breed while remaining vendor neutral.
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.
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