It’s been a little while since we last published a note on COMESA. When there is little substantive news to report, statistics often yield a topic to write about. And so it is with COMESA. The statistic at hand: On Monday, 18. November 2013, the Competition Commission announced that it had received its tenth merger notification.
Here are a few observations on the deal (Total Egypt LLC/Chevron Egypt SAE & Total/Beltone Capital Holdings) that spring to mind:
- Geography: While the recitals fail to mention any common-market dimension of the transaction, it seems to be centered on COMESA member state Egypt. On the face of it, this appears to be an Egyptian deal, and as we have become accustomed to, it is hard to infer from the published information what the nexus to the common market is.
- Repeat party: The notified deal involves a repeat customer of the CCC, namely the oil & energy company Total. A different Total subsidiary had filed for (and has since obtained) approval of another transaction in March: the previous Total/Shell deal, also centered on Egypt, was notified in July. To our knowledge, Total is the first repeat COMESA-notifying party in the CCC’s history. This may well be a positive sign for the CCC.
- Two-for-One, please! The CCC observes in its November 18th notice that it actually received one single notification for de facto two transactions: the Chevron and the Beltone deal. But the parties were quick to point out – smartly so, some would say – that the deals were closely “interrelated” and therefore should be treated as one transaction for purposes of COMESA review. Bottom line: only one notification = only one merger filing fee (!) to pay, which can, as we know, easily hit the half-million dollar mark. In the end, the CCC bought the argument and allowed the parties to make only one single notification.
- Overall statistics: 11 months and 10 merger notifications. That equals less than 1 filing per month. With such a low number, the CCC is certainly not on track to beat other young competition-law enforcers’ merger stats (such as India’s Competition Commission, which has received an average of over 5 notifications per month since its inception two years ago).
- Flying under the radar: Combine Point 4 above (low filing statistics) with the zero-threshold and low nexus requirements that trigger a COMESA merger notification, and the following question inevitably comes to mind: With such low thresholds, and the certain existence of commercial deal activity going on in the COMESA zone, why are there so few notifications? Are parties simply ignoring the notification mandate? And if so, what is the CCC — an enforcement agency, after all — doing about this?
- Cute or lax? As with other official documents on the CCC’s web site, even this mere 2-pager contains what appears to be an unintended inclusion of internal CCC notes that the agency failed to delete prior to publication. It reads as follows: “[these abbreviations are not explained anywhere above].” Someone forgot to review the [short] notice, which has been up for 3 days now, and which does diminish the appearance of professionalism. More importantly, it calls into question the ability of the agency to edit its own documents carefully, redact properly, and thus its capability to maintain the confidentiality of party or non-party submissions. Quoth the Raven: “I wish to assure you that all the information you will make available to the Commission shall be treated with the strictest confidentiality and will only be used for the purpose of this inquiry,” as the standard closing CCC paragraph goes…
In conclusion, the most important practical tip for parties contemplating deals in the COMESA region is perhaps the upshot of Point 3 above: Get a package deal! There is now precedent that the CCC permits such combined notifications, which should allow parties to wrap multiple transactions into one lower-cost filing, thereby avoiding what I am calling in an upcoming article the CCC’s “(Pricey) Tollbooth on the African Merger Interstate“…