COMESA clarifies merger procedure

COMESA Competition Commission’s Revised Guidance Note provides much-needed clarity to parties in avoiding fines for late merger notifications

By Tyla Lee Coertzen

On 20 February 2023, the COMESA Competition Commission (“CCC”) published its “Revised Guidance on Engagement with the COMESA Competition Commission on Merger Filings”[1] (“Revised Guidance Note”), replacing the “Notice of Interim Measures in Merger Review of the COMESA Competition Commission due to the COVID-19 Pandemic”[2] (“Interim Measures Note”).

As per Article 24(1) of the CCC’s Competition Regulations, merging parties must notify proposed transactions to the CCC within 30 days of a ‘decision to merge’. The CCC’s Merger Assessment Guidelines further describe a ‘decision to merge’ to either be:

  • a joint decision taken by the merging parties and so comprise of the conclusion of a definitive, legally binding agreement to carry out the merger (which may or may not be subject to conditions precedent); or
  • the announcement of a public bid in the case of publicly traded securities.

Where merging parties do not provide the CCC with a notification within the above specified time, they are at risk to penalties of up to 10% of the merging parties’ combined turnover in the Common Market.[3] In contemplation of a fine, the CCC will consider the following factors for purposes of determining an appropriate penalty:

  • the nature, duration, gravity and extent of the contravention;
  • any loss or damage suffered as a result of the contravention;
  • the behaviour of the parties concerned;
  • the market circumstances in which the contravention took place;
  • the level of benefits derived from the contravention;
  • the degree to which the parties have co-operated with the CCC; and
  • whether the parties have previously been found in contravention of the CCC’s Competition Regulations.

Where the CCC has found parties to have contravened this Article, the CCC has imposed penalties of 0,05% of the merging parties’ combined turnover in the Common Market. However, where parties derive large turnovers in a number of COMESA Member States, even the lower end of the threshold could result in a hefty fine.

The above provisions have caused uncertainty and adverse effects against companies involved in lengthy deal negotiations and execution of large multinational mergers and acquisitions. Often, preparing a merger notification within 30 days of initial decisions to merge places results in large administrative burdens on merging parties who may meet the requirements of a ‘decision to merge’ even before the drafting or execution of important agreements relating to the merger.

The Interim Measures Note was published during the Covid-19 pandemic as a result of uncertainties relating to the timing of merger notifications submitted to the CCC upon recognition of “unprecedented, uncertain and challenging times.” The Interim Measures Note allowed for a relaxation of various rules related to merger notifications to the CCC, such as an allowance for parties to deliver hard copies of their filings after the prescribed 7-day period.

The Interim Measures Note provided guidance to parties who, as a result of the uncertainty posed by the pandemic, were unable to provide a complete notification to the CCC within the 30-day period as required by Article 24(1). In this regard, the CCC allowed parties to proactively engage with it during the 30-day period at the beginning of the merger notification process. Thereafter, the CCC would consider the filing complete after all information required is submitted. The Interim Measures Note provided that “as long as the parties have engaged the Commission on the notification process, they shall not be penalized for failure to submit complete information within 30 days of the parties’ decision to merge.”

However, the Interim Measures Note seemingly only applied during the ‘temporal period’ where the Covid-19 pandemic was rife.

As a result of the relaxation of Covid lockdown regulations and restrictions worldwide, the CCC has now provided further guidance on parties’ options where merging parties are unable to provide the CCC with a complete filing within the strict 30 day time period.

The Revised Guidance Note replaces and overrides the Interim Measures Notice released in 2020. The Revised Guidance Note recognised that in relation to the approach it took for Article 24(1) prohibitions, the Interim Measures Notice was “widely utilized by merging parties” and that the ‘initial engagement approach’ adopted by the CCC had proven “beneficial for both merging parties and for the CCC in monitoring non-compliance with Article 24(1) of the Regulations.”

As a result of the above, the Revised Guidance Note confirms that the CCC will maintain the ‘initial engagement’ approach until further notice and possible amendment to the Competition Regulations. As such, where parties are uncertain as to the conclusion of a proposed transaction within the strict timer period and fear being penalised for an Article 24(1) contravention as a result, they are advised to engage the CCC on the notification process within the 30-day period and shall therefore avoid being penalised. Importantly, the Revised Guidance Note provides that this approach will not apply where there are “unreasonable and unexplained delays in the parties’ submission of a complete notification.”

The Revised Guidance Note provides useful direction to parties who are engaging in proposed transactions within the Common Market and certainly provides clarity on how merging parties who are in good faith unable to provide a complete merger notification within the period prescribed by the CCC may prevent a fine for non-compliance of Article 24(1).


[1] CCC-Notice-2-of-2023.

[2] CCC-Notice-4-of-2020.

[3] Namely, the COMESA Member States, which comprise of the following jurisdictions: Burundi, Comoros, Democratic Republic of the Congo, Djibouti, Egypt, Eswatini, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tunisia, Uganda, Zambia, and Zimbabwe.

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