Kenyan competition watchdog approves advertising deal

CAK allows Synovate buyout by Ipsos after out-of-court deal

Kenyan competition watchdog has given its nod to the acquisition of Synovate Kenya by Ipsos, more than six years after the deal was first struck, following an out-of-court settlement of a dispute in which the parties were accused of flouting competition law.

French firm Ipsos in 2014 went to court to sue the Competition Authority of Kenya (CAK) and the Director of Public Prosecutions after it was cited for failing to follow the law in its 2011 acquisition of Synovate.

The drawn-out legal dispute meant that the acquisition of the Kenyan unit remained in technical limbo.

“We settled the matter out of court, they paid a penalty then re-submitted their application and we approved,” said CAK director-general Wang’ombe Kariuki in an interview.

In a January 10 notice, Mr Kariuki said that the Authority had decided to exclude the acquisition from the requirements of antitrust law because the transaction would “not affect competition negatively” even though the turnover of the Kenyan unit, Sh816 million in 2016, breached the minimum threshold for mandatory notification. Mr Kariuki did not reveal the fines levied on Ipsos.

Ipsos acquired Synovate from British firm Aegis in a global deal worth 525 million pounds (about Sh75 billion at current exchange rates), creating the world’s third-largest market research company.

However, the deal got into trouble locally when the CAK cited Ipsos for failing to seek approval, setting up the company’s directors for heavy fines and potential jail terms.

Ipsos argued that the competition law and regulations had not come into force by the time it sought to acquire Synnovate. Ipsos further argued that it had notified CAK of the intention to merge in December 2011.

It is this dispute that has now been settled out of court.

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