On May 24, 2023, the Moroccan legislature ushered in a new era of merger control with the implementation of heightened notification thresholds. While this move doesn't entirely resolve the existing challenges surrounding local considerations in the Moroccan merger control system, it undeniably signifies a crucial step towards acknowledging and addressing the issue.
Thresholds Overview
Under the new framework, a merger filing obligation may be triggered in three distinct scenarios, incorporating both market share and turnover-based criteria. Notably, only one of these thresholds needs to be met for the obligation to apply, streamlining the notification process.
Market Share-Based Threshold
One of the pivotal aspects that remains unchanged is the market share-based threshold. This criterion necessitates notification if the combined market share of the merging parties within Morocco surpasses the 40 percent mark. It's worth noting that even a single party's market share can potentially meet this threshold, emphasizing its significance in the evaluation process.
Adjusted Turnover Thresholds
Significant modifications have been made to the turnover thresholds. Previously, parties were required to meet either a combined annual worldwide turnover of MAD 750 million or a Moroccan turnover of at least MAD 250 million for notification. Under the new regime, the Moroccan turnover threshold has been elevated to MAD 400 million, aligning with the evolving economic landscape.
Global and Local Turnover Nexus
The most substantial change introduced pertains to the interplay between global and local turnovers. To trigger the worldwide turnover threshold, it is now imperative for at least one party involved in the transaction to possess a turnover in Morocco. Parties must demonstrate a combined annual worldwide turnover exceeding MAD 1.2 billion, with at least one party boasting an annual turnover in Morocco surpassing MAD 50 million.
Implications for Transactions
This nuanced combination of worldwide and domestic turnovers mirrors the approach adopted by Egyptian merger control thresholds in their new pre-closing notification regime. Both jurisdictions allow for a filing obligation to arise, even if only one party possesses turnover within the respective country, provided the combined worldwide turnover reaches a specified threshold.
Local Nexus Considerations
However, akin to the Moroccan scenario, the issue of local nexus has not been conclusively addressed by the Egyptian legislator. It raises pertinent questions about the stance that authorities in both Morocco and Egypt will take regarding this crucial aspect of merger control.
The implementation of the new merger control notification thresholds in Morocco marks a significant milestone in the evolution of the country's regulatory landscape. While the emphasis on local turnover demonstrates a step in the right direction, the question of local nexus considerations continues to be a pertinent one. It remains to be seen how authorities in Morocco and Egypt will navigate this intricate terrain, and how businesses will adapt to these evolving regulations. As the global business landscape continues to shift, staying abreast of these developments will be crucial for companies engaged in cross-border mergers and acquisitions.
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