The Competition Authority of Kenya (CAK) has given the go ahead for the acquisition of Base Titanium Limited, by EFR Australia PTY Limited.
In the deal, EFR Australia PTY Limited will take over operation in Kenya a few months before the closure of operation by Base Titanium later this year.
Thereafter, the Victoria-based firm will resume operations.
EFR Australia PTY Limited is an Australian-based company that is wholly owned by Energy Fuels Inc. (EFI), a firm registered in Canada.
EFI is a mining development and production company that engages in the exploration, evaluation, development, and mining/production of uranium, vanadium, and rare earth element properties.
“The proposed transaction involves the acquisition of 100 per cent of the issued and outstanding shares in the capital of Base Resources Limited by way of a scheme of arrangement in exchange for shares in the capital of Energy Fuels Inc. According to the parties, the rationale for the transaction is diversification of EFR PTY’s mining business,” CAK said in a statement.
The Authority stated that the transaction qualified as a merger within the meaning of sections 2 and 41 of the Competition Act CAP 504.
explaining that the Competition Act stipulates a merger or takeover may occur when an undertaking directly or indirectly acquires control over another business within Kenya.
This according to CAK may happen through various means, including the purchase or lease of shares, exchange of shares, or vertical integration.
Earlier, Base Resources Limited, an Australian firm that owns Base Titanium Limited in Kwale, informed the shareholders that they will get 0.026 of Energy Fuels common shares after the transaction.
Kwale’s Base Titanium Limited owns and operates a mineral mine in the coastal county and explores ilmenite, rutile, and zircon for export.
“One criterion of assessing a merger’s impact on competition is the post-merger market share of the undertakings involved in the transaction. Post-merger, the merged entity’s market share will not change since the target and the acquiring group do not operate in Kenya,” CAK added.
The competition Authority maintained that the proposed transaction will not affect the structure and concentration of the market for titanium minerals in Kenya.
"Therefore, the proposed transaction is unlikely to lead to a substantial lessening of competition in the market for titanium minerals in Kenya.”