African M&A: Review of New Merger Control Regulations for 19 African Nations

October 1, 2013

On January 14, 2013 a new merger control regime created by the Common Market for Eastern and Southern Africa (COMESA) came into force. The regime requires notification of mergers where at least one of the parties operates in two or more of COMESA’s member states.  Failure to notify may result in penalties and/or the merger being of no legal effect in the COMESA region.

COMESA’s merger control regime affects 19 African nations and is enforced by the COMESA Competition Commission (CCC). Decisions made by the CCC are adjudicated by COMESA’s Board of Commissioners.

In November, proposals aimed at improving the merger control regime are expected to be reviewed by COMESA’s Council of Ministers. In the meantime, companies need to be aware of the current regulation and some of its peculiarities.

Response to the merger control regime has been mixed. Applause for its original aim of streamlining mergers in COMESA’s 19 member states has been silenced due to concerns over high filing fees, low thresholds for filings, long review periods and conflicting views regarding whether the CCC has exclusive jurisdiction to review transactions meeting COMESA’s filing thresholds. It is also unclear how the regime will operate in relation to mergers consummated outside the COMESA region that fall within the scope of the merger control regime.

Who are affected by the regulation? COMESA requires the CCC to be notified of the direct or indirect acquisition or establishment of a controlling interest in a business by one or more persons in whole or in part where at least one of the parties operates in two or more of COMESA’s 19 states. The merger control regime also applies to sales and leases of assets.  Draft Merger Guidelines published by COMESA indicate that COMESA’s merger control rules will apply only to full-function joint ventures.

As drafted, the regulation applies to mergers which have an appreciable effect on trade between member states and which restrict competition in the COMESA region.  The Draft Merger Guidelines are silent regarding the interpretation of this provision; however, it is possible the CCC could conclude that no notification requirements would apply to firms with insufficient links to the region. The CCC is currently considering amending the regulation to provide greater clarity as to whether a transaction is likely to have an appreciable effect on trade between member states and, as a result, be subject to the COMESA regime.

Financial thresholds are currently set at zero. Therefore, all notifiable transactions, regardless of size, must file with the CCC.

Who are the member states of COMESA?

Burundi Malawi
Comoros Mauritius
Democratic Republic of the Congo Rwanda
Djibouti Seychelles
Egypt Sudan
Eritrea Swaziland
Ethiopia Uganda
Kenya Zimbabwe


COMESA was originally advertised as a one-stop-shop procedure for filings in the region, however, certain member states have argued that a filing to the CCC is not a substantive filing under national rules. As a precaution, member states with competition commissions should also be notified.

Who must notify? Generally speaking, both the acquirer and target must file notices to the CCC. However, in the event of a hostile bid, only the acquirer is required to file.

What are the timelines for notification and review?
Submissions need to be filed ‘as soon as it is practicable but in no event later than 30 calendar days of the merging parties’ decision to merge’.

The CCC may take up to 120 working days to review a transaction. An extension may be requested by the CCC but any extension must be approved by the Board of Commissioners.

What are the filing fees? Fees are calculated at the higher of 0.5% of either the merging parties combined annual turnover or combined value of assets in member states. Fees are capped at $500,000 (USD).

What are the penalties for non-compliance? Parties who negligently or intentionally fail to notify the CCC of a merger may be fined up to 10% of aggregate turnover in the region. More importantly, mergers will have no legal effect and will be unenforceable in the region.

What is the substantive test used for the review? The substantive test is a two-step process.

Firstly, the CCC is required to make a preliminary assessment whether or not the merger is likely to substantially prevent or lessen competition. If the assessment concludes there is no or little risk to competition within the region, a ‘no objection’ decision will be issued to the applying parties.

Secondly, if it appears a substantive risk that the merger is likely to substantially prevent or lessen competition, the CCC must determine whether the merger will strengthen a position of dominance contrary to public interest.

Further information is available on the COMESA website at

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