The Competition Authority of Kenya has approved the proposed merger between Commercial Bank of Africa and NIC Group.
However, the approval is on condition that “…none of the employees of the merged entity are declared redundant within 12 months of closing the transaction in Kenya.”
In January, NIC and CBA respective Board of Directors agreed to the merger. The proposed merger will be executed through a share swap. An exchange share ratio will be based on a 47:53 relative valuation of NIC and CBA respectively.
Post-merger, the market share of merged entity will be 10.67%. This will make it the second largest bank.
“However, it is anticipated that the merged entity will continue facing competition from Tier 1 banks who, together, control 55.32% of the market,” said CAK in its Monday statement.