New strict merger control regime for Eastern and Southern Africa

United Kingdom

On 14 January 2013, the Competition Commission for the Common Market for Eastern and Southern Africa (COMESA) became operational, bringing into effect a new supra-national competition law regime for much of Africa.  The new regime includes new merger control regulations under which the COMESA Competition Commission (CCC) will operate as a one-stop shop for transactions with a regional COMESA dimension.  However, with costly filing fees, lengthy periods of review and heavy penalties for non-compliance, the new regime is likely to have a significant impact on international and regional transactions.  In the absence of any clear guidance, companies in the region and beyond should proceed with caution.


COMESA comprises the following member states: Burundi, Comoros, the Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, and Zimbabwe.

In December 2004, the Competition Regulations were adopted.  The Regulations include the establishment of a new merger control regime with effect on 14 January 2013.  Almost all transactions with a connection to the 19 Eastern and Southern African states that are members of COMESA now have to be notified to the CCC.

The regime

The key features of the new merger control regime are:

  • Any merger or acquisition where at least one of the parties operates in two or more COMESA member states must be notified to the CCC where the transaction has “an appreciable effect on trade between Member States and which restricts competition in the Common Market”.  As mentioned below, it is unclear what the term “operating” means for this purpose.  This means that some transactions will be notifiable even where the target has no presence in a COMESA state.  Non-notifiable mergers may also be reviewed at any time by the CCC at its request.

  • Filings are mandatory and must be made within 30 days of the decision to merge.  Each party must individually submit a notification to the CCC.  Each party must pay a filing fee of the lower of either (a) US$500,000 or (b) the higher of 0.5% of the parties’ combined annual turnover or combined value of assets in the COMESA region.  The maximum fee of US$500,000 is almost twice that of the next most expensive regime, the United States, at US$280,000.

  • Completion of a transaction must be suspended pending clearance.

  • The CCC Merger Form requires extensive information to be supplied.  Merging parties will have to provide information on their business activities and the products or services that form part of the transaction.

  • Should a party wish to keep certain information confidential, they must complete a form identifying the confidential information by page, paragraph and line number, explain the information’s economic value, and provide a justification for the confidentiality.  The CCC will then decide whether to grant confidentiality or not.  By all accounts, this process may prove to be burdensome and costly.

  • The CCC will have 120 days from receipt of a complete notification to reach its decision.  This timeframe may be extended.  At present there is no alternative simplified procedure for very minor transactions. 

  • The CCC will reach its decision based on a two-fold test.  First, the CCC will consider whether the merger “is likely to substantially prevent or lessen competition”.  Second, the CCC will assess (i) whether the merger will produce benefits greater than its anti-competitive effects; and (ii) whether it can be justified on public interest grounds.

  • Failure to notify carries a fine of up to 10% of the parties’ aggregate annual turnover in the COMESA region for the preceding financial year, and may result in any merger being declared null and void in the COMESA region.

  • Appeals are available to “aggrieved parties” via complaint to the Board of Commissioners, another competition body alongside the CCC.  However, precise details of the appeals procedure, and who may constitute “aggrieved parties”, have not yet been given.


The announced requirements seem to have caused more uncertainty than clarification.  Some of the fundamental issues requiring elaboration include whether COMESA member states’ own competition authorities will have to be notified as well as the CCC.  At present eight members of COMESA have their own national merger control regimes which involve merger control filings - Burundi, Egypt, Kenya, Malawi, Mauritius, Swaziland, Zambia, and Zimbabwe. 

COMESA member states may request the CCC to refer back part of, or the entire, transaction where the merger is likely to disproportionately reduce competition to a material extent in all or part of that member state.  The CCC will have 21 days following receipt of the request to decide whether to refer the transaction, in whole or in part, to that relevant state authority, or to retain the matter itself.  This creates the potential for multiple, parallel investigations.

Some of the terminology and definitions used in the regulations require clarification.  For example, the crucial concept of operation in two or more Member States is unclear.  Will this only be triggered by a physical presence in the region, or would any activity or interest be sufficient?  There are hints of further guidance being provided, however, it is unclear as to if/when this will happen.

Reforms to wider competition regime

Even if notification is not required under the merger control regulations, companies should still bear in mind the reforms to the wider competition regime. This regime involves behavioural prohibitions which are subject to financial penalties and which have a discretionary exemption for ventures designed to improve “the production or distribution of goods or… technical or economic progress” and providing consumers with “a fair share” of the technological or economic benefits.  The award of this exemption is entirely at the CCC’s discretion. For the avoidance of doubt, these behavioural prohibitions do not require prior notification for clearance.


Whilst there is much about COMESA’s new merger regime that remains unclear, it is certain that companies entering into any form of transaction or agreement in the African region must take careful heed of this new regulation.  The impact on the timing and cost of transactions in the region will be significant.

In addition, companies with agreements in place may wish to re-evaluate these arrangements, and seek advice on whether they are compliant with the regime or will require an application for exemption.