Mergers and acquisitions in Kenya have become more regulated in the last twelve months than at any point in recent years. Since late 2025, two regional competition regimes have become suspensory, which means certain deals that cross their thresholds cannot close until a regulator clears them. Add Kenya’s own merger control rules, sector regulators and a tax framework that changes with every Finance Act, and the legal path from term sheet to completion has never mattered more.
This guide is for founders, business owners, investors and corporate development teams planning mergers and acquisitions in Kenya, whether buying, selling or combining a business. It sets out nine legal steps that keep a deal on track and explains where transactions most often go wrong.
What changed for mergers and acquisitions in Kenya
COMESA. The COMESA Competition and Consumer Protection Regulations, 2025 came into force on 5 December 2025. Mergers that meet the COMESA thresholds can no longer close before clearance. The thresholds rose to combined COMESA turnover or assets of USD 60 million, with at least two parties each having USD 10 million in the region. A separate test applies to digital deals with a transaction value of USD 250 million. Filing fees are now 0.1% of combined turnover or assets, capped at USD 300,000. The COMESA Competition Commission publishes the rules and practice notes.
EAC. The East African Community’s merger regime became suspensory on 1 November 2025, with notification required where combined turnover or assets in the Community reach USD 35 million and at least two parties each reach USD 20 million. Kenya belongs to both blocs, so some deals may need to consider both regimes until the two bodies agree how to allocate cases.
Kenya. At home, the Competition Authority of Kenya applies the thresholds in the Competition (General) Rules, 2019. Broadly, full notification is required where the parties’ combined turnover or assets in Kenya are at least KES 1 billion and the target’s exceed KES 500 million, with an exclusion process for smaller deals and special rules for some sectors. A Competition (Amendment) Bill, 2026 is also before Parliament and would, if passed, extend merger control to certain privatisations.
9 legal steps for mergers and acquisitions in Kenya
1. Choose between a share deal and an asset deal
In a share deal, the buyer acquires the company, with all its history, contracts, liabilities and licences. In an asset deal, the buyer chooses which assets and liabilities to take, but each asset must be transferred separately, and licences, leases and contracts may need fresh consents. The choice affects tax, regulatory approvals, employees and risk, so it should be made early and on advice.
2. Run legal due diligence that matches the deal
Due diligence for mergers and acquisitions in Kenya should cover corporate records and the beneficial ownership register, material contracts and change of control clauses, land and leases, employment, intellectual property, litigation, licences and regulatory compliance, tax and data protection. Under the Data Protection Act, 2019, data controllers and processors may need to be registered with the Office of the Data Protection Commissioner, and a target with weak data compliance carries real risk, especially in fintech, health and retail. Our recent piece on the ODPC’s cross border data transfer guidelines explains why this now matters in deals.
3. Model the tax before you agree the price
Capital gains tax applies at 15% on gains from the sale of shares or property. Stamp duty is generally payable on transfers of shares in unlisted companies and on transfers of land. Asset deals can raise VAT and stamp duty on individual assets. Each Finance Act brings changes, so the structure should be tested against current law and Kenya Revenue Authority guidance before the price is fixed.
4. Map every merger control filing
Merger control is now where mergers and acquisitions in Kenya most often lose time. Check the Kenyan, COMESA and EAC thresholds together, because a deal can trigger more than one regime, and the two thirds rule in each framework affects where a deal is reviewed. With suspensory regimes now in place, implementing a notifiable deal before clearance exposes the parties to significant penalties. Build the filing timetable into the transaction documents, including a longstop date that allows for regulatory review.
5. Identify sector regulator approvals
Many sectors require regulatory approval before a change of control. Banks and other institutions licensed by the Central Bank of Kenya, insurers regulated by the Insurance Regulatory Authority, listed companies under the Capital Markets Authority’s takeover rules, telecoms licensees and energy licensees all have their own requirements. In fintech, the Virtual Asset Service Providers regime adds another layer, which we discussed in our analysis of the 2026 VASP Regulations.
6. Negotiate the transaction documents
The sale and purchase agreement is where risk is allocated in mergers and acquisitions in Kenya. Key provisions include the price and any adjustment mechanism, conditions precedent, warranties and indemnities, the disclosure letter, limitations on claims, restrictive covenants and the conduct of the business between signing and completion. In joint acquisitions, a shareholders agreement sets the rules for governance, funding, transfers and exit.
7. Plan for employees
Employees deserve early attention. In a share deal, employment contracts generally stay with the company. In an asset deal, the position is more complex, and any restructuring that leads to job losses must follow the redundancy procedure in the Employment Act. Mishandled employee issues can lead to claims and disrupt the business at the point the buyer needs stability.
8. Close properly and file promptly
Completion involves signing, payment, delivery of share certificates or asset transfers, board and shareholder resolutions and, where needed, regulatory clearances. After completion, filings must be made with the Business Registration Service, including updates to the register of beneficial owners, and land, vehicle or intellectual property transfers must be registered with the relevant registries.
9. Integrate and protect the value
The legal work does not end at completion. Contracts may need to be novated, policies harmonised and any conditions attached to regulatory approvals complied with. Warranty claims also have time limits, so buyers should review the business against the warranties within the agreed window.
Common reasons mergers and acquisitions in Kenya stall
In our experience, deals rarely fail on price alone. They stall when merger control was not mapped early, when a key contract turns out to have a change of control clause, when land held by the target has title problems or when tax exposure surfaces late in due diligence. Each of these can be anticipated, and most can be managed if they are found early.
Frequently asked questions
How long does an acquisition in Kenya take?
It depends on the size of the deal and the approvals needed. A small private deal with no merger filing can complete relatively quickly. A deal that needs Kenyan or regional merger clearance and sector approvals will take considerably longer, and the timetable should reflect the statutory review periods.
Does every acquisition need Competition Authority approval?
No. Only transactions that meet the definition of a merger and the relevant thresholds need notification or an exclusion. Smaller deals may fall outside merger control altogether. Each deal should be assessed against the current rules.
Can a foreign company acquire a Kenyan business?
Generally yes, but sector specific ownership rules apply in some industries, and land owned by the target must comply with the constitutional limits on non citizen ownership.
Speak to an M&A team before you sign the term sheet
Thomas Louis Advocates advises buyers, sellers, investors and founders on mergers and acquisitions in Kenya and across East Africa, including due diligence, structuring, merger control and transaction documents. Learn more about our Mergers and Acquisitions practice and our Corporate and Commercial Transactions practice.
To discuss a transaction, you can contact our team, email [email protected] or call +254 115 702 315.
This article is for general information only and does not constitute legal advice. Thresholds, fees and tax rates change, so please seek advice on your specific transaction.
