Financial Times: Africa “most exciting”; FT hosts inaugural investment summit

First-ever FT African Investment Summit to be held in London

In October, the Financial Times will be hosting a timely “FT-Live” London symposium on investment in Africa.  The Oct. 6th FT Africa Summit (agenda) is expected to draw a global audience from various industry sectors, limited to 150 attendees.

Whether or not the conference will spark a wave of M&A activity (and hence antitrust scrutiny) on the continent remains to be seen.  For now, the paper’s event PR proclaims optimistically:

The continent’s economic growth is the second fastest in the world, underpinned by a virtuous cycle of improved governance, Chinese-led investments in infrastructure, high commodities prices, and the growth of a nascent, even if fragile, middle class. Yet, risks abound, from rising inequality to the potential of setbacks in governance.

The inaugural FT Africa Summit will provide a global platform to hear and discuss the views of finance ministers, investors and businesses leaders from around the region. Altogether the first Summit and the special report will be a unique opportunity to gain insights into one of the world’s most exciting markets.

Today’s edition also reports, fittingly, that large-scale investors (such as Atlas Mara’s head and  former Barclays CEO Bob Diamond) are looking increasingly to the African continent for high-growth financial investment opportunities.  Diamond is reported to have raised $1/3 billion for his “African war chest” of Atlas Mara to invest in African bank acquisitions, and is said to plan another $400m round of fund-raising later this year.

Bob Diamond

As the FT points out, the growth potential for financial services in sub-Saharan Africa is theoretically immense, as the majority of the region’s 1-billion-plus population does not yet have bank accounts.  However — and the FT omits this crucial fact — as we reported elsewhere, the dearth of access to brick-and-mortar banks in Africa has led to the pioneering use of GSM mobile technology, such as M-Pesa, for retail financial transactions at a record-setting adoption rate in Africa; see our M-Pesa reporting and other stories.


Competition authority issues sectoral warning, threatens criminal sanctions


Wake-up call to would-be cartelists and monopolists in Kenya

The Standard reports that the Competition Authority of Kenya (“CAK”) (AAT archive on CAK issues here) is threatening cartelists with prison terms of up to 5 years and fines up to 10 million Shilling ($115,000).

According to the report, CAK Director General Francis Wang’ombe Kariuki said that “investigations are already being conducted in [the] transport, insurance, shipping, milling, banking, cement, sugar, health care and tea” sectors, pursuant to purported consumer complaints.

CAK Director General Kariuki

The CAK has actively pursued antitrust matters, using novel approaches of late, as AAT recently reported on a seemingly hybrid unilateral/collusion case (“Kenya: Lafarge faces possible price-fixing penalties due to cross-shareholding“).  The CAK is also the sole COMESA member enforcement authority that has, to our knowledge, challenged the fledgling and issues-plagued COMESA Competition Authority’s jurisdiction in various merger cases.

COMESA old flag color

Malicious COMESA web site attack: Competition Commission hacked 3rd time

For the third time in a month, the fledgling pan-African antitrust enforcer’s web site has been disabled by hackers

As competition-law attorneys counseling clients on the necessity of notifying mergers in the COMESA jurisdiction, we view these developments with – put mildly – shock.  This is especially true as confidential party data and documents would appear to be at risk of involuntary and malicious disclosure to third, unauthorized parties.  As reported at, the COMESA enforcement agency’s web site has previously been hacked and later simply disabled.

COMESA leadership non-responsive

On both prior occasions, AAT’s editors wrote to the COMESA Competition Commission‘s webmaster, as well as the agency’s leadership (Messrs. George Lipimile and Willard Mwemba), to seek an explanation of the attacks.  We also asked them about the safety of data and other confidential party information submitted to the CCC via its extranet & online document repository.

Not only have we not received any response to date.  What’s more, in a – perhaps unsurprising, at this stage – turn of events, the Commission has now been subjected to its third hacking attack.

Hackers boast of achieving successful attack

This latest episode also embodies the most disconcerting hack, as it appears visually and substantively more malicious than the prior attacks (one of which featured an Indonesian love poem, whilst the second rendered the CCC’s page simply blank).  A visual example of the latest attack can be found below.  The hackers (identified as “Kinal Undetected” from SerdaduPerangCrew and SPCSO) [note: prior and subsequent links open hacker-related pages] acknowledge – for the first time – that it is an intentional event and not merely an accidental outage or otherwise unintended gaffe of the CCC’s webmaster.  Moreover, the perpetrators even submitted a screenshot of the intrusion to “Zone H“, a clearing-house of hackers, as evidence of the attack on Monday.  This means that the CCC’s site has been disabled for at least two full days (through 14 May — UPDATE: the regular COMESA site is back up and running at 16:00 CET, 14th May).  On the prior occasions, the site likewise remained compromised for several days in a row.

Logo of the successful COMESA hackers displayed on CCC’s web site (May 12-13, 2014)

High risk of data security breach & next steps

We are in the process of sending yet another follow-up e-mail to the CCC’s executives to obtain further information about this unsettling and embarrassing security breach/failure, including: (1) risks to confidential corporate information, (2) the impact on the private deliberative process of the Commission, as well as (3) steps the CCC intends to take to prevent future replication of these embarrassing and dangerous attacks, including (we propose) the retention of a professional data-security firm for advice and potentially management of the web interface.

COMESA hack no3


Call for parties to CCC proceedings to take action

Especially in light of COMESA staff’s unsettling silence in response to alerts to these attacks, and as we have done before, we are notifying our readership (and particularly current or potential future parties to CCC merger reviews) regarding the deficiencies in the competition enforcer’s electronic systems. These may impact the timetable and resulting deadlines of pending merger investigations, and it is advisable that all such interested parties enquire with the Competition Commission about the procedural effect of the outage.

Positive outlook for Ghana M&A activity

Future of Ghanaian M&A deals promising, according to bankers

The Benso Oil Palm Plantation and FanMilk International deals (both involving foreign investment in the country) over the past year are merely an indication of an upward mergers & acquisitions trend, according to a GhanaWeb report.

Usually, with increased merger activity comes heightened competition scrutiny, of course — not so in Ghana, however, as the West-African country still lacks an antitrust and merger-review law.  AAT noted in December:

[Ret. Ghanaian Supreme Court] Justice Date-Bah, who has held visiting academic positions at Oxford and Yale Law School, deplored the legislature’s previously failed attempts of enacting a comprehensive competition law, calling for the country to do so to ensure proper market dynamics.

The most recent economic report quotes Randolph Rodrigues, sr. investment banker at Stanbic Bank Ghana, as predicting “a rise in M&A activity in the country given the increasing emphasis on local content across sectors in the country.”

“The renewed quest for the institution of local content requirements across industries is expected to drive a wave of M&A activity, with larger foreign-owned enterprises seeking partnership opportunities with indigenous operations to continue to grow within the legal framework of their respective industries. Banks are well placed to lead the way in advisory services.”

In AAT’s view, four factors may contribute to the anticipated deal volume and influx of foreign investment, of which one is competition-law based: (1) the absence of antitrust hurdles, as noted above, (2) the relatively open Ghanaian economy, (3) stable political climate (unlike its distant neighbor at the moment, Nigeria), and (4) high intrinsic growth rate of Ghana’s GDP:

ghana gdp growth

Ghana’s GDP growth (blue line) compared to Kenya and Cameroon

Investment in Africa: Changing landscape, new hurdles

Questioning African antitrust growth prospects: Slowdown in economic investment (both organic and outside investment) may affect functioning of competition law on the continent

Recent developments in Africa have many scratching their heads and wondering whether the formerly wondrous economic-growth engine of the vastly resource-rich and otherwise economically still undervalued continent will soon experience a slowdown, if not come to a halt altogether.

For one, in April 2014, Nigeria surpassed South Africa as the continent’s largest economy (see Economist Apr. 12, 2014: “Africa’s New Number One“).  This is a significant milestone for the former, and a setback for the latter — an economy that was 8 times the size of the Nigerian economy only 20 years ago, yet is now suffering from stagnating GDP, reeling from corruption allegations amongst its current leadership, undergoing a closely-watched presidential election process, and whose ruling ANC party is facing a heretofore unprecedented backlash and torrent of criticism.

Source: The Economist

Not only South Africa has weakened, politically and economically, however.  Events such as the Northern Nigerian wave of violence – with sectarian Boko Haram forcefully displaying the impotence of the central Nigerian government of a weakened president Goodluck Jonathan – fuel the fire of outside investors’ mistrust of African stability and their concomitant reluctance to make good on prior investment promises.  As The Economist notes in the article quoted above: “it is not a place for the faint-hearted” to invest, even though it highlights the successful Nigerian business ventures of outsiders such as Shoprite, SABMiller, and Nestlé.  Bloomberg BusinessWeek quotes Thabo Dloti, chief executive officer of South Africa’s fourth-largest insurer Liberty Holdings Ltd. (LBH), as saying: “It does slow down the plans that we have, it does put out the projections that we have by a year or two.”

Nigerian vs. RSA GDP

Likewise, multi-national organisations such as COMESA and its competition enforcement body, are undergoing significant changes (such as, currently, an opaque process of raising the heretofore insufficient merger-filing thresholds), shockingly successful web attacks on their data, and a resulting dearth of transactions being notified.  Elsewhere in developing economies, recent political turmoil has likewise led observes to comment on the negative spillover effect from political & social spheres into the economy (e.g., Financial Times, May 8, 2014: “Political crisis further dents prospects for Thai economy“).

Impact on antitrust practice

The upshot for competition-law practitioners and enforcers alike is rather straightforward, AAT predicts: more hesitation around African deals being done means fewer notifications, less enforcement, and overall lower billings for firms.

The flip side of the coin – as is usually the case in the economic sine curve of growth and slowdowns – is the commonly-observed inverse relationship of M&A and criminal antitrust: while we may see fewer transactions in the short term, the incidence of cartel behaviour and commercial bribery & government-contract fraud cases will likely increase.

Commission’s fisheries merger conditions upheld on review by Tribunal


Competition Tribunal confirms Commission’s ruling on Oceana and Foodcorp merger

Johannesburg-listed Ocean Group Limited is the largest fishing company in South Africa, whose fishing activities include inter alia the catching, processing, marketing and distribution of canned fish, fishmeal and fish oil and mid-water and deep-sea fishing.

Foodcorp Limited is a food producer and manufacturer with eight production divisions, one of which is a fishing division. Foodcorp’s fishing business comprises a pelagic division, a hake division and a lobster division.

The Competition Commission said its investigation into the proposed transaction showed that the proposed transaction would substantially affect competition in the market for canned pilchards to the detriment of competition and customers. Following implementation of the transaction, Oceana will hold 80% of the market, while its closest competitor would hold less than 10%. Furthermore, the Commission was concerned that the transaction, without the conditions, would remove an efficient competitor to Oceana’s Lucky Star brand from the market, as Glenryck would not be able to provide competition to Lucky Star without its own fishing quota.

Both Oceana and Foodcorp contended that the Department of Agriculture, Forestry and Fisheries had approved the transfer of Foodcorp’s small pelagic fishing rights to Oceana, which includes the consideration of public interest issues regarding black economic empowerment.

The merging parties had taken the conditional approval of the intermediate merger on review before the Competition Tribunal. The conditions which the Competition Commission had imposed entailed that the merging parties are to sell the Glenryck canned-pilchards brand to an independent third party, as well as the small pelagic fish quota allocated to it by the Department of Agriculture, Forestry and Fisheries. The condition was imposed as a means that would deprive Oceana of Foodcorp’s fishing quota, thereby preventing market dominance.

The Competition Tribunal approved the transaction on the same conditions initially imposed by the Competition Commission. The Tribunal will issue its reasons for the decision in due course.

Tsogo Merger Unconditionally Approved


Unconditional approval of SA hotel deal

The Competition Tribunal of South Africa (“Tribunal”) has unconditionally approved the merger of Southern Sun Hotel Interests (Pty) Ltd (“Southern Sun Hotel Interests”), which is a subsidiary of Tsogo Sun Holdings Limited, and The Cullinan Hotel (Pty) Ltd (“The Cullinan Hotel”).

The merger related to the provision of short-term hotel accommodation. Pre-merger, Southern Sun Hotel Interests held a 50% shareholding in The Cullinan Hotel and exercised joint control with Liberty Holdings Limited (“Liberty”) over The Cullinan Hotel. Southern Sun Hotel Interests acquired an additional 10% shareholding in the Cullinan Hotel from Liberty, thus increasing its shareholding in the joint venture to a majority interest of 60% and thereby acquiring sole control of The Cullinan Hotel.

The Tribunal approved the merger without any conditions.  Nortons Inc. represented Southern Sun Hotel Interests in this transaction.

Continental Divide: Revisiting the GE/Honeywell merger saga

A Merger Denied, 13 years later: The GE/Honeywell Saga

Through COMESA, a regional organization on which this resource has published extensively, African countries have made a significant foray into cross-border merger control.

As the world’s competition regimes continue to proliferate, a global understanding and international cooperation are becoming increasingly essential to a coherent worldwide merger-control scheme and parties’ concomitant legal strategy.

(Originally published by Thomson Reuters Limited in: Sophia A. Vandergrift and Josselin J. Lucas, “The GE/ Honeywell Saga? Ehh, What’s Up Doc? A comparative approach between US and EU merger control proceedings almost 15 years after”, [2014] 35 E.C.L.R. 172 – reproduced with permission [1])

By Sophia A. Vandergrift (FTC) & Josselin J. Lucas (Paul Hastings LLP) [2]


Almost 15 years ago, on the eve of Independence Day, on July 3, 2001, the EU Commission decided to prohibit the acquisition of Honeywell by General Electric.[3] The EU Commission’s decision to block this transaction was subject to a firestorm of criticism as the U.S. Department of Justice previously decided not to challenge the transaction. As noted at that time by Ms. Deborah Platt Majoras,[4] then Deputy Assistant Attorney General, Antitrust Division, U.S. Department of Justice:

“The U.S./EU divergence on the GE-Honeywell decision underscores the need to continue working cooperatively and constructively (…). The Antitrust Division has been open, both in private discussions with our counterparts at the European Commission and in appropriate public fora, in our disagreement with the EU’s decision and the bases for it. Indeed, we have been criticized by some as being overly critical. We respectfully disagree. In our view, for cooperation to be meaningful, i.e., for it to contribute significantly to effective global antitrust enforcement, it must include honest discussion of areas of agreement and disagreement, and careful dissection of divergent decisions”.[5]

In a recent speech delivered in Washington, D.C., Joaquin Almunia, Vice-President of the European Commission responsible for Competition Policy stated:

“I believe that, almost 15 years after the GE/ Honeywell saga, a lot has been made to ensure that our respective authorities understand each other’s concerns when they arise”.[6]

In this regard, 2013 was a distinct year for the EU and U.S. Agencies. Several cases provoked strong cooperation between them, notably in the aviation industry (General Electric/Avio[7]and American Airlines/US Airways[8]) and in advertising activities (Publicis/Omnicom[9]). Mr. Almunia also pointed out that cooperation does not mean identical decisions “because of the different features of our respective markets” (e.g., see the EU Commission’s prohibition decision in NYSE Euronext/ Deutsche Börse in February 2012, a transaction that was previously cleared by the U.S. DOJ).

Almost 15 years after the “GE/Honeywell Saga”, the purpose of this article is to analyze the similarities and differences between EU and U.S. merger control proceedings. Several aspects are dealt with, including the legal framework (I.), the preliminary analysis (II.), the notification process (III.) and the procedural aspects (IV.). The funding principles of the cooperation between the EU and U.S. agencies are also detailed (V.).

I.        Legal Framework

Applicable Rules

The first EU Merger Control Regulation was adopted in December 1989 and entered into force in September 1990.[10] The current EU Merger Control Regulation n°139/2004 became effective on May 1, 2004.[11] In the United States, two primary statutes govern the merger control review process, namely: (i) §. 7A of the Clayton Act of 1914; and (ii) the Hart-Scott-Rodino Improvements Act of 1976.

Enforcement Agencies

Merger control review is divided in Europe between two types of agencies, depending upon whether applicable thresholds are met. At the EU level, the Directorate General for Competition of the EU Commission (DG Comp) has jurisdiction over EU-dimension cases. At the national level (i.e., where EU thresholds are not met but local thresholds are met), National Competition Authorities have jurisdiction to review the transactions.

In the United States, merger review is divided between two agencies: the Department of Justice (DOJ) and the Federal Trade Commission (FTC). Parties proposing a deal submit pre-merger notification filings to both agencies.[12] Pursuant to a pre-merger notification and clearance process, the deal is assigned to the agency with the greatest historical experience in the relevant commercial sector. Allocating mergers between the agencies by industry ensures that any given merger is reviewed by the enforcers with the greatest resources and depth of expertise concerning the relevant industry. Moreover, this process is efficient in that it allows the agencies to avoid duplication of expertise and promotes consistent outcomes.

Judicial Review

The EU Commission has powers of decision.[13] In practical terms, it can block any transaction that would seriously restrict competition within the EU (e.g. UPS/TNT Express in January 2013,[14] NYSE Euronext/ Deutsche Börse in February 2012,[15] General Electric/Honeywell in July 2001[16]). When the EU Commission issues a decision prohibiting a transaction that has already been implemented, the EU Commission may require the Parties in question to take steps to restore conditions for effective competition, including divestiture. Parties can file an application for annulment against the EU Commission’s administrative decision to the General Court of the EU.

In the United States, only Federal Courts have ultimate authority regarding whether to block a transaction. But before a merger reaches such ultimate disposition, the agencies’ processes for pursuing a remedy meaningfully diverge according to the agencies’ differing statuses and authorizing statutes. For instance, the FTC is an independent agency led by five politically-appointed commissioners who must authorize enforcement action. In contrast, the DoJ is an executive branch agency lead by an Assistant Attorney General. The agencies face slightly different standards when seeking preliminary relief from a federal district court.[17] Further, Congress vested the FTC with authority to conduct a full agency merits trial in the first instance, only after which the merging parties can appeal to the commission and then to a federal court. Based on the diverging processes, parties pursuing a merger against agency efforts to block the transaction face different time and resource requirements depending on which agency is reviewing the deal.

Is the Requirement to Comply With Local Merger Control Rules Limited to “Change Of Control”

As for EU merger control and at this stage, the answer is clearly positive. Basically, the EU Merger Control Regulation applies to “concentrations”, a concept which is widely defined to cover various operations that bring about a “change of control on a lasting basis”.[18] Two kinds of change of control, either on a de jure or on a de facto basis, may be subject to merger control proceedings: sole control[19] or joint control.[20] Sole control is usually acquired as a result of the acquisition of the majority of the voting rights in a company (de jure control). A substantial minority shareholder may be regarded as having de facto control, if for example, it is highly likely that the shareholder will achieve a majority of the votes cast at shareholders’ meetings (de facto sole control). Joint control exists where several entities have the ability to exercise decisive influence over another entity.

From a European perspective, the answer to this question has always been crystal clear. In this regard, minority shareholdings that do not lead to a change of control are currently not subject to EU Merger Control Regulation. However, the EU Commission would want to extend the scope of the EU Merger Control Regulation and have jurisdiction over those non-controlling minority shareholdings,[21] which would imply a significant modification of the above founding principles. Mr. Almunia recently stated that Europe is “looking at the experience of some EU countries and of other jurisdictions such as the U.S., where merger-control rules already cover this type of acquisition”.[22]

In the United States, the requirement to comply with the HSR Act is not limited to transactions that involve a “change of control”. Any acquisitions that results in the acquiring person holding more than US$75.9 million worth of voting securities of another company may require a filing, even if the amount represents a very small percentage of the total outstanding stock of the Target company. However, acquisitions of less than 50% of a non-corporate entity are not reportable. The agencies have authority to, and indeed, sometimes do, challenge non-reportable transactions that raise competitive concerns.[23]

II.     Preliminary Analysis

Notification Thresholds

In both the European Union and the United States, transactions are reviewed by the local agencies if local thresholds are met.

At the EU level, only turnover/revenues threshold exist and have not been modified since May 1, 2004. More precisely, there are two series of alternative thresholds: primary thresholds or secondary thresholds. Primary thresholds[24] are met where: (i) the combined aggregate worldwide turnover/revenues of all the undertakings concerned exceed €5 billion; (ii) the aggregate EU-wide turnover/revenues of all the undertakings concerned exceeds €250 million. Alternatively, secondary thresholds[25] are met where: (i) worldwide turnover/revenues of the undertakings concerned exceed €2.5 billion; (ii) the aggregate EU-wide turnover/revenues of each of at least two of the undertakings concerned exceed €100 million; and (iii) in each of at least three Member States of the EU (a) the combined aggregate turnover/revenues of all the undertakings concerned is more than €100 million and (b) each of at least two of the undertakings concerned achieves a turnover of more than €25 million (in each of the same three Member States identified). However, even if the above alternative primary or secondary thresholds are met, a concentration does not have a EU dimension if each of the undertakings concerned achieves more than two-thirds of its aggregate EU-wide turnover within one and the same Member State of the EU.

In the United States, three different types of thresholds, which are updated annually in order to take into account inflation, exist. These thresholds are not only based on local revenues. In order to be subject to U.S. Merger Control Rules, a transaction has to meet the commerce test (i.e. either the acquiring or acquired person is engaged in U.S. commerce or in any activity affecting U.S. commerce) and the size-of-the-transaction test (i.e., transactions over US$75.9 million) and the size-of-the-parties test. One party must have worldwide assets or sales over US $151.7 million and the other party must have worldwide assets or sales over US$15.2 million. Where the size-of-the-party test is not satisfied, the size-of-the-transaction threshold is US$303.4 million.

Specificities as for Foreign-to-Foreign Transactions

In the European Union, there are no specific thresholds for Foreign-to-Foreign Transactions.

On the contrary, in the United States, the basic test is whether the acquired person or assets generated at least US$75.9 million in sales in the United States in the last year. A limited additional exemption for certain transactions with values under US$303.4 million also exists.


In the European Union, if there is a change of control (or a change in the quality of control) and applicable thresholds are met by the undertakings concerned, a notification is required. There is no exemption.

In the United States, an important step at the very beginning of the process is to determine whether the contemplated transaction qualifies for any of the exemptions set forth in the HSR Act or the Rules. There are lots exemptions (e.g., the acquisition of goods or realty in the ordinary course of business; certain acquisition of voting securities “solely for the purpose of investment”).

III.   Notification Process

Deadline to File

In both jurisdictions, notification is mandatory for transactions meeting applicable thresholds and there is no specific deadline to file. However, transactions cannot be closed until approval is obtained.

Who Must Notify

In any cases, the EU Commission only receives one filing for each transaction. However, two scenarios can be distinguished. In case of acquisition of sole control, only the Acquirer has to fill out a Form. In case of acquisition of joint control, the joint controllers have to fill out one and the same Form.

In the United States, in most cases, two filings are received by the U.S. Agencies – one from the Acquiring Person and one from the Acquired Person. In 2012, a total of 1,429 transactions were reported to the U.S. Agencies representing 2,829 filings received.[26]

Language of the Notification

The EU Commission must receive a notification in one of the 24 official languages of the EU, which becomes the language of the proceedings or all notifying Parties.[27] Other parties, including the Target Company, as well as Third Parties involved in the proceedings may use another official language of the EU if they wish. In the United States, the notification is in English only.

Filing Fee

At the EU level, there is no filing fee. In some Member States of the EU, National Competition Authorities may receive a fee (e.g., Austria, Germany, Italy).

In the United States, the filing fee depends upon the size of the transactions. The filing amounts is US$45,000 for transactions valued in excess of US$75.9 million but less that US$151.7 million. For transactions up to US$758.6 million, the filing fee is US$125,000. For transactions over US$758.6 million, the filing fee is US$280.000.

Voluntary Notification

In both jurisdictions, there is no procedure for “voluntary” filing for transactions that do not meet thresholds that are exempt. In the EU, if a transaction meets local thresholds in three Member States of the EU, Parties can ask the EU Commission to review the case instead (“the one-stop-shop principle”). Likewise, in both jurisdictions, transactions that are not notified can be investigated even after they are closed.

As for transactions for which a notification is not required, the U.S. Agencies can and do investigate. It is also possible in the EU but not on the basis of EU Merger Control Rules and would be probably conducted on the basis of antitrust regulations.

Penalties for Failure to File

The EU Commission may impose fines of up to 10% of the worldwide revenues of the Parties. Electrabel was fined €20 million in June 2009 by the EU Commission for failure to file and observe the waiting period for the period from 23 December 2003 to 9 August 2007.[28] Electrabel brought an action for annulment before the General Court of the EU, which confirmed the fine in December 2012.[29]

The HSR Act aims to preserve the pre-merger competitive status quo until the agencies investigate the potential effects of a merger. In the U.S., only Federal Courts may impose fines up to US $16,000 a day for violation of the HRS Act, either for complete failure to file, or for premature integration known informally as “gun jumping.” In short, the HRS Act prohibits merging parties from transferring beneficial ownership of assets, or otherwise effectively consolidating operations pending termination of the HSR waiting period. In May 2013, Biglari Holdings was ordered by the U.S. District Court for the District of Columbia to pay an US$850,000 civil penalty to settle the charge (the complaint alleged that Biglari failed to file and observe the waiting period prior to closing as for certain acquisitions of shares of Cracker Barrel in June 2011).[30]

What Goes in the Notification

In both jurisdictions, information to be furnished in the Notification Form is similar: description of the contemplated transaction, corporate information on the Ultimate Parent Entity, owners, affiliates, and subsidiaries, prior acquisitions, production, and sales data by product or service category.

Likewise, the documents to be submitted at the same time as the Notification Form are also of the same nature. It includes: transaction documents (e.g., copy of the merger or acquisition agreement), government/ financial documents (last annual reports and annual audit reports), analytic documents (i.e., documents prepared for management to analyze the transaction, including documents discussing synergies or efficiencies, which include those prepared by third-party advisors like investment bankers, consultants, etc.).

IV.    Procedural Aspects

Timeline for Most Investigations

Most merger control investigations handled by the EU Commission are closed within « Phase I » (i.e., within 25 working days which could be extended to 35 working days). In the United States, most investigations are closed within the first 30 day period. In both jurisdictions, when the waiting period has expired and the agencies have taken no action (U.S.) or no formal decision (EU), the transaction may be consummated.

Procedural Aspects During the Initial Waiting Period/Phase I

After filing, the antitrust agencies have to review the transaction. In both jurisdictions, the Parties may request that the Agencies terminate the waiting period before it has run its full course. The agencies may, at their discretion, grant such requests.

Outcomes of Initial Waiting period/Phase I

In the European Union and the United States, there are basically three possible outcomes. The investigation may expire, in which case the Parties are free to close. It may be early-terminated by the U.S./ EU agencies in which case the Parties are free to close. It may alternatively be extended by a request for additional information (commonly referred to as a “Second Request” in the U.S. and “Article 6.1(c)” decision in the EU, opening an in-depth investigation “Phase II”).

In-Depth Investigation

If they think that the contemplated transaction presents serious antitrust concerns, the U.S. and EU agencies can issue a Second Request and an art.6(1)(c) decision, respectively.

In 2012, 10 transactions were subject to Phase II investigation by the European Commission out of a total of 283 transactions that were notified to the EU Commission.[31] Meanwhile, 49 transactions were subject to a Second Request by the U.S. Agencies out of a total of 1,429 reported transactions that were reported to the U.S. Agencies (representing 2,829 filings received).

Timetable of In-Depth Investigation

The EU timetable of the in-depth investigation is extremely different from the U.S. timetable.

As for European Merger Control Rules,[32] the EU Commission has 90 working days (after the date on which the in-depth investigation was initiated), which can be extended to 105 working days where commitments are offered by parties within 55 working days of the commencement of Phase II. An extension of the Phase II time limit is also possible at the request of the parties, for a period of up to 20 further working days. Several detailed questionnaires are usually sent by the EU Commission. Economic analysis is required very early in the process. The volume of requested documents is usually much smaller than in the United States.

In the United States, the waiting period clock is stopped until both Parties certify compliance with the Second Request. After certification of compliance, the agency has another 30 days of review, unless the agency negotiates a timing agreement that alters this timeline. Second Requests typically demand ordinary-course-of-business documents, data, and interrogatory answers. Second Requests may require extensive production of party materials, sometimes requiring that the Parties produce hundreds of thousands or even millions of documents from numerous company employees and from their operations all over the world. If the requested documents are not in English, the Parties must prepare and submit translations. The parties and the agencies negotiate regarding the necessary number of document custodians, investigational hearings, or investigatory depositions. In many cases, compliance takes months to achieve.

Fundamental Differences in the In-Depth Investigation Approach

The EU Commission can block any transactions (e.g. UPS/ TNT Express in January 2013; NYSE Euronext/ Deutsche Börse in February 2012; Olympic Airways/Aegean Airlines in 2011; and Ryanair/Aer Lingus in 2007). The EU Commission will not have to sue in EU Courts and demand an injunction to block the transaction. For procedural infringements, the EU Commission can itself impose periodic penalty payments or fines (up to 1% of the aggregate worldwide revenues of the Parties) where Parties, intentionally or negligently:[33] (i) supply incorrect or misleading information in a submission, certification, or notification or in response to a RFI, or product incomplete books or records during an inspection or refuse to submit to an inspection, or (ii) do not supply information within the required time limit, (iii) fail to rectify within a time limit set by the EU Commission an incorrect, incomplete, or misleading answer, or (iv) break seals affixed by the EU Commission or other authorized persons in the course of inspections. Where the Parties have subsequently satisfied the obligation that the periodic penalty payment intended to enforce, the EU Commission may fix itself the definite amount of the periodic penalty payments at a figure lower than that which would arise under the original decision.

V.       Cooperation Between EU Commission and U.S. Agencies

The list of cases in which the EU Commission and U.S. Agencies have closely cooperated in the past 10 years is long and includes: Oracle/PeopleSoft (2004); Sony/BMG (2004); Johnson & Johnson/Guidant (2005); Panasonic/Sanyo (2009); Cisco/Tandberg (2010); Intel/McAfee (2011); Western Digital/Hitachi (2011); NYSE Euronext/Deutsche Börse (2012); and UTC/Goodrich (2012)[34]. In 2013 specifically, several cases were subject to significant discussions between the EU and U.S. Agencies, e.g., General Electric/Avio, American Airlines/US Airways and Omnicom Publicis. The U.S. /EU Merger Working Group’s ongoing policy dialogue, together with regular informal contacts, allows the EU and U.S. agencies to advance inter-agency cooperation and consistency.

Two documents provide directives and parameters for cooperation between the EU and U.S. regimes.

First, the U.S.-EU Competition Laws Cooperation Agreement (adopted in 1991 and subject to periodic amendment) “promote[s] cooperation and coordination and lessen[s] the possibility or impact of differences between the [U.S./ EU] in the application of their competition laws”.

The Agreement requires each jurisdiction to notify the other when its enforcement activities may affect “important interests” of the other jurisdiction.

As for merger control proceedings, the EU Commission shall give such notifications to the U.S. Agencies once notice of the Phase I investigation is published in the EU Official Journal and if it decides to initiate Phase II proceedings. This enables the views of the U.S. Agencies to be taken into account before a decision is adopted. Conversely, the U.S. Agencies shall notify the Commission if a Second Request is issued and if they decide to file a complaint challenging the transaction. This enables the views of the EU Commission to be taken into account before the entry of a consent decree.

Second, the U.S.-EU Best Practices On Cooperation In Merger Investigations (published in October 2011)[35] aims to enhance coordination on the timing of reviews (e.g., joint conferences and joint interviews with party executives), collection and evaluation of evidence (e.g., discussions about their respective analyses regarding tentative market definitions, assessment of competitive effects, efficiencies, theories of competitive harm, economic theories, and empirical evidence), and communication between the reviewing agencies (especially regarding remedy offers). The Best Practices are a useful framework for cooperation, particularly by indicating critical points in the process where contacts between the respective Agencies could be productive.

Basically, consultations between the U.S./EU Agencies occur: (a) before the U.S. closes its investigation without taking action; (b) before the U.S. issues a Second Request; (c) no later than three weeks following the initiation of a Phase I investigation in the EU; (d) before the EU opens a Phase II investigation or clears the merger without going to Phase II; (e) before the EU closes a Phase II investigation without issuing a Statement of Objections or approximately two weeks before the EU anticipates issuing its SO; (f) before the relevant U.S. DOJ/ FTC section/division investigating the merger makes its case recommendation to the relevant director; and (g) at the commencement of remedies negotiations with the merging parties. Consultations between senior competition officials can also be set up.

U.S. and EU officials may attend certain key events in the other’s investigative process (e.g., the EU’s Oral Hearing and the merging parties’ presentations to the Assistant Attorney General/Director of the Competition Bureau at which the Parties present their arguments prior to the agency’s decision as to whether to take enforcement action). In practical terms, waivers of confidentiality executed by merging Parties are necessary. In this regard, the Best Practices are also of great importance in order to clarify the application of the attorney privilege, which is significantly different in the EU and the U.S. It is accepted that the Parties can exclude from the scope of their waiver evidence given to the EU Commission that is properly identified by them as, and qualifies for, the in-house counsel privilege under U.S. law.[36]


The U.S. Agencies’ role has shifted in the last 10 years. Prior to the “GE/Honeywell Saga”, the U.S. Agencies tended to be the world’s primary antitrust regulator. After GE/Honeywell, the EU Commission became much more active. In practical terms, massive analysis required for EU Form CO at a very early stage now tends to drive initial process.

The landscape is still in flux. Future merger practice will have an even greater global focus, and multinational merging parties will need to be proactive in multiple jurisdictions outside the U.S. and the EU.

The Chinese MOFCOM is taking an increasingly active role. In Baxter Inc./Gambro AB, the transaction was cleared by the EU Commission on 22 July 2013[37] and on 8 August 2013 by the MOFCOM.[38] As for the contemplated transaction, EU and Chinese Agencies required similar structural remedies. However, the U.S. and EU analysis is not always accepted by the MOFCOM. In Seagate/Samsung in 2011, the MOFCOM imposed significant remedies that contrasted with the unconditional approvals granted by the EU[39] and U.S. Agencies.

The cooperation between the Chinese MOFCOM and the U.S. Agencies, on the one hand, and the EU Commission, on the other hand, is being strengthened. Although fairly modest in terms of content, two Memoranda of Understanding were signed by the MOFCOM with the U.S. Agencies and the EU Commission respectively in July 2011[40] and September 2012.[41] Other major jurisdictions are ramping up their merger review regimes, including Brazil[42] and India.[43] Through COMESA, a regional organization, African countries have made a foray into merger control, too.[44] As the world’s competition regimes continue to proliferate, cross-border understanding and cooperation will become increasingly essential to a coherent global merger control scheme.


If you have any questions concerning these developing issues, please do not hesitate to contact the authors.



[1]   This material was first published by Thomson Reuters Limited in Sophia A. Vandergrift and Josselin J. Lucas, “The GE/ Honeywell Saga? Ehh, What’s Up Doc? A comparative approach between US and EU merger control proceedings almost 15 years after”, [2014] 35 E.C.L.R. 172 and is reproduced by agreement with the Publishers.

[2]   The views expressed by the authors in this article are their own and not those of the FTC or any individual Commissioner and/or of Paul Hastings LLP or any of its clients. The authors would like to thank Michael Stevens for his advice and assistance with this article.

[3]   European Commission, GE/Honeywell, Case COMP/M.2220, Decision of 3 July 2001.

[4]   Ms. Platt Majoras was appointed to serve as Chairwoman of the Federal Trade Commission in 2004 until she stepped down in 2008.

[5]   Deborah Platt Majoras, “GE-Honeywell: The US Decision, Remarks of Deborah Platt Majoras, Deputy Assistant Attorney General, Antitrust Division, US Department of Justice, Before the Antitrust Law Section, State Bar of Georgia”, November 29, 2001.

[6]   Joaquin Almunia, “EU competition policy, relations with the U.S., and global business”, Georgetown University Law Center, 7th Annual Global Antitrust Enforcement Symposium, Washington, D.C. (USA), 25 September 2013, speech n°13/749.

[7]   European Commission, GE/Avio, Case COMP/ M.6844, Decision of 1 July 2013.

[8]   European Commission, US Airways/American Airlines, Case COMP/ M.6607, Decision of 5 August 2013.

[9]   European Commission, Publicis/Omnicom, Case COMP/M.7023, Decision of 9 January 2014, not yet published. Press release n°IP/14/10. In his speech dated 25 September 2013 delivered in Washington DC (op.cit.), Mr. Almunia noted: “As to the near future, I expect our dialogue to continue – among other cases – on the transactions between the US advertising group Omnicom and its French competitor Publicis; a deal that would create the world’s biggest advertising group”.

[10] Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings.

[11] Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings.

[12] Premerger Notification Program, FTC, (last viewed Jan. 14, 2014).

[13] Article 8 of Council Regulation (EC) No 139/2004 of 20 January 2004.

[14] European Commission UPS/TNT Express, Case COMP/M.6570, Decision of 30 January 2013, not yet published. Press release n° IP/13/68.

[15] European Commission, Deutsche Börse/NYSE Euronext, Case COMP/M.6166, Decision of 1 February 2012.

[16] European Commission, General Electric/Honeywell, Case COMP/M.2220, Decision of 3 July 2001.

[17] 15 U.S.C. § 53(b) (for the FTC a preliminary injunction is warranted with “a proper showing that… [issuances of a preliminary injunction] would be in the public interest.”). The DOJ must meet the federal courts’ traditional, and perhaps more stringent, standard for a preliminary injunction.

[18] Article 3.1 of Council Regulation (EC) No 139/2004 of 20 January 2004.

[19] European Commission Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004 of 20 January 2004, § 54-61.

[20] European Commission Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004 of 20 January 2004, § 62-82.

[21] European Commission Staff Working Document, “Towards more effective EU merger control”, 25 June 2013, see especially part II on merger control for the acquisition of non-controlling minority shareholdings (“structural links”).

[22] Joaquin Almunia, “EU competition policy, relations with the US, and global business”, Georgetown University Law Center, 7th Annual Global Antitrust Enforcement Symposium, Washington DC (USA), 25 September 2013, op.cit.

[23] See, e.g., FTC v. St. Luke’s Health Sys., Ltd., 1:13-CV-00116-BLW, (D. Id. Mar. 26, 13); United States v. Twin America, LLC et. al, 12-cv-8989 (S.D.N.Y. Dec. 11, 2012).

[24] Article 1.1 of Council Regulation (EC) No 139/2004 of 20 January 2004.

[25] Article 1.2 of Council Regulation (EC) No 139/2004 of 20 January 2004.

[26] Hart-Scott-Rodino Annual Report, Fiscal Year 2012, Appendix B.

[27] Article 3.4 of Commission Regulation (EC) No 802/2004 of 7 April 2004 implementing Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings.

[28] European Commission, Decision of 10 June 2009 imposing a fine for putting into effect a concentration in breach of Article 7(1) of Council Regulation (EEC) No 4064/89 (Case COMP/M.4994 Electrabel/Compagnie Nationale du Rhône).

[29] General Court of the European Union, Judgment of 12 December 2012, T-332/09, Electrabel v. European Commission. An appeal is pending before the European Court of Justice (C-84/13 P).

[30] US v. Biglari Holdings, Final judgment, 30 May 2013, US District Court for the District of Columbia, Civil Action No. 1:12-cv-01586.

[31] EU Commission statistics available at

[32] Article 10 of Council Regulation (EC) No 139/2004 of 20 January 2004.

[33] Article 14 of Council Regulation (EC) No 139/2004 of 20 January 2004.

[34] European Commission, UTC/Goodrich, Case COMP/ M.6410, Decision of 26 July 2012.

[35] US-EU Merger Working Group, Best practices on cooperation in merger investigations, 14 October 2011, and FAQs on the US-EU Merger Working Group’s Best practices on cooperation in merger investigations, available on the EU Commission’ website:

[36] US-EU Merger Working Group, Best practices on cooperation in merger investigations, 14 October 2011, footnote n°10 and FAQs on the US-EU Merger Working Group’s Best practices on cooperation in merger investigations, §11.

[37] European Commission, Baxter International/Gambro, Case COMP/ M.6851, Decision of 22 July 2013.

[38] MOFCOM Announcement No. 58 of 2013 on Approval of Decisions on Anti-monopoly Review Against Concentration of Undertakings in the Acquisition of Gambro AB by Baxter International Inc. with Additional Restrictive Conditions.

[39] European Commission, Seagate/HDD Business of Samsung, Case COMP/ M.6214, Decision of 19 October 2011.

[40] Memorandum of Understanding on Antitrust and Antimonopoly Cooperation Between the US Department of Justice and Federal Trade Commission and the People’s Republic of China National Development and Reform Commission, Ministry of Commerce and State Administration for Industry and Commerce, 27 July 2011.

[41] Memorandum of Understanding on Cooperation in the area of anti-monopoly law between the EU Commission (Directorate General for Competition) and the National Development and Reform Commission and the State Administration for Industry and Commerce of The People’s Republic of China, 20 September 2012.

[42] A memorandum of understanding was signed on 8 October 2009 between the Directorate General for Competition of the EU Commission and the Brazilian Authorities. An agreement between the US and Brazilian Governments regarding cooperation between their competition authorities in the enforcement of their competition laws were signed on 26 October 1999.

[43] Memoranda of understanding were signed by the Competition Commission of India with the US Agencies on 27 September 2012 and, separately, with the Directorate General for Competition of the EU Commission on 21 November 2013. See Joaquin Almunia, “Competition, innovation and growth: an EU perspective on the challenges ahead”, Third BRICS International Competition Conference, New Delhi, 21 November 2013, speech n°13/958: “Only a few years ago, our dialogue was limited to some authorities, such as the FTC and the DOJ from the US”.

[44] The Common Market for Eastern and Southern Africa (COMESA) Competition Commission, (last viewed Jan. 14, 2014).

Kenya: Lafarge faces possible price-fixing penalties due to cross shareholding


East Africa back on antitrust enforcer’s mat in hybrid unilateral / collusion case

The Competition Authority of Kenya (“CAK”) has alleged that Lafarge has engaged in price-fixing due to the company’s cross-shareholding in cement producer Eastern African Portland Company and Bamburi Cement. (Interestingly, links to Bamburi Cement’s site).

The CAK is investigating whether Lafarge is responsible for an unwarranted concentration of economic power, given that Lafarge has a 41.7% interest in Eastern African Portland Company and a 58.9% interest in Bamburi Cement. A ruling as to whether Lafarge has “unwarranted concentration of economic power” is expected in June 2014.  In the event that Lafarge is found guilty of the charge against it, the Kenyan Competition Authority could direct the Lafarge to sell assets in one of the two businesses.  Furthermore, the directors could also be forced to pay up to USD115,000 in penalties or serve five years in prison if found guilty of price-fixing.

The CAK report comes four months after the Kenyan government, which together with the Kenyan National Social Security Fund, has a controlling stake of 52.3% in Eastern African Portland Company alleged that Lafarge tried to destabilise Eastern African Portland Company to protect Lafarge’s interests in Bamburi, the report noted. The CAK indicated that “cross-directorship could lead to price-fixing since this creates a position where a competitor is privy to the strategic decisions of another competitor. However, it is not conclusive that there is price-fixing going on.”  Lafarge has stated its minority interest in Eastern African Portland Company is insufficient to enable Lafarge to exert control over it.

This allegation comes at an interesting time given the spotlight on Lafarge due to its proposed merger with cement producer Holcim, which has already triggered insider-trading investigations elsewhere.  The proposed transaction will likely require notification in the European Union, United States, Russia, China, India, Morocco, South Africa and multi-national enforcer COMESA (which includes Kenya and would presumptively take priority over the CAK’s domestic review authority, although a jurisdictional fight between the two agencies would not be unheard of).


Slow-going M&A statistics in COMESA before anticipated threshold revision

COMESA Competition Commission logo

Strong numbers from early 2014 did not hold up

After posting a record three merger notifications in January, the COMESA Competition Commission has seen its M&A filing statistics decline to zero in February and merely one in March.

As we have reported here (optimistic for 2014) and here (pessimistic on 2013 statistics), COMESA’s notified M&A deals have seen erratic ups & downs.  Not surprising, perhaps, if one considers the exquisite confusion that has reigned since the inception of the young antitrust authority about filing thresholds and fees.

The current ebb in notified deals (despite the record set in January) reflects, in our view, the impending end of the current “zero-threshold” regime in COMESA, which was foreshadowed by The CCC’s head of mergers, Willard Mwemba, back in late February 2014.  Quite understandably, parties to ongoing transactions are willing to risk “flying under the radar” if the agency has de facto admitted that the zero-dollar filing threshold is unworkable in practice.

We are curious to see what impact the vacuum of the pending revision to the COMESA merger rules will have on filing statistics going forward, until a more sensible threshold is set by the agency.  For now, with the latest notification #4/2014 (fertilizer and industrial products acquisition by Yara International ASA of OFD Holdings Inc.*) the stats look like this:

* we note that in the notice, the CCC erroneously set the deadline for public comment prior to the notice date itself, namely as “Friday, 28th February, 2014.”

competition law antitrust Africa

COMESA CCC M&A filing statistics as of March 2014