CAK approves Celebi Cargo takeover of Transglobal Cargo

The Competition Authority of Kenya (CAK) has approved the acquisition of the entire issued share capital of Transglobal Cargo Centre Limited by Celebi Cargo GMBH. The regulator said the transaction will not negatively affect competition in the cargo handling market or raise public interest concerns.

Celebi Cargo GMBH operates as an air cargo handling company at Frankfurt Airport, handling about 200,000 tonnes of cargo annually. The company does not have operations in Kenya. Transglobal Cargo Centre Limited operates in Kenya under the name Africa Flight Services and provides ground handling services at Jomo Kenyatta International Airport, including cargo handling, warehousing and ramp services.

The transaction involves the acquisition of 100 per cent of Transglobal Cargo by Celebi Cargo. According to the parties, the transaction is intended to position the combined entity as a provider of ground handling and cargo services in Africa, with a focus on Kenya. The deal is also expected to lead to increased investment in facilities, equipment and human resources.

The Authority said the transaction qualifies as a merger under the Competition Act, as it involves the acquisition of control of a Kenyan business. The combined turnover and assets of the parties exceeded the threshold requiring mandatory notification and review.

In assessing the transaction, the Authority defined the relevant product market as cargo handling services. It noted that Celebi Cargo is active in air cargo handling, while Transglobal provides ground handling services. The relevant geographic market was defined as national, as the target’s clients are spread across the country.

The Authority noted that cargo handling involves a range of services within the logistics chain, including services provided by airlines, cargo operators and ground handlers. It also observed that competition in the sector is influenced by factors such as network coverage, service reliability and pricing.

Data from the Kenya Airports Authority shows that Africa Flight Services accounts for 33 per cent of export cargo handling and 20 per cent of import handling at Jomo Kenyatta International Airport. Other operators include Kenya Airways Cargo, Signon Group, Swissport and Mitchell Cotts. The Authority said the transaction would not change market structure since the acquirer has no existing presence in Kenya.

The review found that the acquisition would not lead to a substantial lessening of competition in the cargo handling market. It also found that the transaction would not affect employment, small and medium enterprises or the ability of local industries to compete in international markets.

Based on these findings, the Competition Authority of Kenya approved the transaction without conditions.