Mergers & Acquisitions

Mergers and acquisitions (M&A) is the practice of structuring, negotiating, and executing transactions in which one business acquires another — whether through the purchase of shares, the purchase of assets, a statutory merger, or a scheme of arrangement. M&A is one of the most complex and high-stakes areas of commercial law, involving multiple parties, significant financial exposure, regulatory approvals, and a tight timeline. In Kenya, M&A transactions are governed by the Companies Act, 2015, the Competition Act, 2010, the Capital Markets Act (for listed companies), and sector-specific regulations where applicable.

Their M&A service covers the full transaction lifecycle. Advocates begin with the structuring phase — advising the client on whether to structure the deal as a share purchase or an asset purchase, and on the tax, regulatory, and commercial implications of each approach. Advocates draft the term sheet or letter of intent, which sets out the key commercial terms and the exclusivity and confidentiality arrangements that will govern the negotiation period.

The due diligence phase is where the legal risks of the target are identified and assessed. Advocates conduct legal due diligence on the target company — reviewing its corporate documents, contracts, employment matters, litigation, regulatory compliance, intellectual property, real estate, and tax position. Advocates prepare a due diligence report that identifies the risks, assesses their materiality, and recommends risk mitigation strategies — whether through specific indemnities, price adjustments, or conditions precedent.

The definitive agreement phase involves the drafting and negotiation of the share purchase agreement (SPA) or asset purchase agreement (APA). These are the most detailed and heavily negotiated documents in any M&A transaction. Advocates draft the representations and warranties, the indemnities, the conditions precedent, the completion mechanics, the restrictive covenants, and the dispute resolution provisions. Advocates negotiate these provisions with the counterparty's counsel, striving to protect the client's position while keeping the deal moving.

Regulatory approvals are a critical path item in many transactions. Advocates handle the notification to the Competition Authority of Kenya, which is required for mergers that meet the financial thresholds. Advocates manage the interaction with the Authority, respond to queries, and secure the clearance — which can take up to 120 days. For transactions in regulated sectors — banking, insurance, telecommunications, media — they handle the sector-specific approvals as well.

At completion, they manage the transfer of shares or assets, the payment of the purchase price, the delivery of the completion deliverables, and the post-completion filings (stamp duty, share transfers, board changes, regulatory notifications). Advocates also handle post-completion integration matters — the harmonisation of employment terms, the novation of contracts, and the rebranding of the acquired business — where these fall within the legal workstream.