The Competition Authority of Kenya (CAK) has approved Celebi Cargo GMBH’s proposed acquisition of Transglobal Cargo Centre Limited, stating that the transaction is unlikely to negatively affect competition in the cargo handling market or public interest.
Celebi Cargo GMBH, an air cargo handling business operating at Frankfurt Airport, will acquire 100% of the shares in Transglobal Cargo Centre Limited, a private company known for its ground handling services at Jomo Kenyatta International Airport in Nairobi, Kenya, under the brand name Africa Flight Services (AFS).
This proposed deal, valued at Sh5.17 billion ($40.1 million), is intended to establish the merged entity as a leading provider of ground handling and cargo services, with a particular focus on the Kenyan market. The parties anticipate that this will lead to increased investment in facilities, equipment, and human resources within the industry.
The transaction, which qualifies as a merger with its combined turnover or assets exceeding one billion, met the threshold for mandatory notification and underwent a full analysis in accordance with the Competition (General) Rules, 2019.
Celebi Cargo GMBH’s involvement in air cargo handling and Transglobal Cargo’s provision of ground handling services, including transit shed, warehousing, cargo handling, ramp, and passenger handling, clearly indicate that the relevant product market is indeed cargo handling. Given that the clients of the parties are spread throughout the country, the relevant geographic market is national.
Competition parameters in the cargo handling industry are influenced by global reach, specialized services, reliability, pricing, cost structures, and sustainability initiatives. Another crucial part of the analysis focused on market structure.
According to data from the Kenya Airports Authority (KAA), there is a competitive landscape at JKIA, with several established players. Africa Flight Services holds 33% of export and 20% of import handling shares, competing with others like Kenya Airways Cargo (22% exports, 32% imports), Signon Group (20% exports, 19% imports), Swissport (15% exports, 9% imports), and Mitchell Cotts (3% exports, 4% imports).
The watchdog assessed the post-merger market share, concluding that the market share of the target will not change as the acquirer has no existing presence in the market. Therefore, the structure and concentration of the market for cargo handling will not be affected, and the proposed transaction is unlikely to raise competition concerns.
Furthermore, the Competition Authority also considered the impact of the proposed transaction on public interest. It determined that the proposed transaction is unlikely to have any impact on employment and is not expected to negatively impact competition for national industries in international markets, nor will it have any direct impact on the activities of SMEs.
