IPS Cable Systems Ltd has made a bid to acquire a further shareholding in Africa’s premier fibre optic undersea cable firm, SEACOM.
The move, which was announced last week, seeks to reorganize the SEACOM’s broadband business in Africa.
Following a statement by the Comesa Competition Commission, IPS Cable Systems Ltd is seeking to increase its shareholding by another 10% of SEACOM, the Sh65 billion fibre cable.
Comesa will examine the details of this development.
IPS (Industrial Promotion Services) and JHL (Jubilee Holdings Ltd) already owns a significant stake in Seacom through IPS Cable Systems Ltd.
The transaction would confer more authority and ownership of its subsidiaries. Both IPS Cable Systems and Seacom are registered in Mauritius and it is unlikely that Kenyan regulators will have a say in the multi-billion-shilling deal.
The move will not affect competition in the lucrative broadband infrastructure sector as demand for internet connectivity spikes.
SEACOM started its operations in 2009 and serves Kenya, Mauritius, and Uganda.
“The parties have submitted that the proposed transaction involves the acquisition of 100% shareholding in the target by IPS resulting in IPS indirectly owing 25% voting rights and 10% economic rights in SEACOM Capital Ltd (Mauritius). It was submitted that the proposed transaction will further grow and enhance the business of the target and assist steering the target on a sustainable growth trajectory into the future in a diverse range of African markets,” reads a statement by Comesa.
“The Commission will, in accordance with the provisions of the Regulations, determine among other things whether or not the merger is likely to substantially prevent or lessen competition within the Common Market and whether the merger is or would be contrary to the public interest as provided for under Article 26 of the Regulations,” adds the regulator.