The competition law regime for the Common Market for Eastern and Southern Africa ("COMESA") went live on 14 January 2013 with the creation of a new supra-national African competition law authority, the COMESA Competition Commission ("CCC").

The CCC will review any merger or acquisition where: 

  • There is a change of control on a lasting basis; and
  • At least one party "operates" in two or more COMESA states, regardless of the parties' local revenues and assets or the size of the transaction.  

The CCC has indicated that it interprets the concept of "control" by reference to the EU merger control regulation, which in turn defines control widely as the possibility of exercising "decisive influence" over a business through the acquisition of shares or assets, on a contractual basis or by other means (such as economic dependence). In practice, this interpretation of the meaning of control could potentially make a wide range of deals subject to the CCC jurisdiction. 

A transaction falling under the CCC's jurisdiction needs to be filed only with the CCC and not individual COMESA states. However, akin to EU merger control regulations, the regime provides for a number of referrals to individual COMESA states for them to review a deal instead of the CCC.

With regard to filings:

  • A filing must be made within 30 days of the parties' decision to merge.
  • Parties may complete their deal prior to a decision being granted by the CCC. However, the CCC has cautioned that if a merger is implemented after the parties notify the CCC and the CCC prohibits the merger, they run the risk of having to undo the merger after the CCC's decision is made.
  • Sanctions for failing to notify the CCC or implementing a transaction that has subsequently been prohibited by the CCC may include the transaction being deemed to not be legally enforceable in COMESA and the parties being fined up to 10 percent of the aggregate local turnover.
  • Each party must pay a filing fee of the higher of: (i) US$500,000 or (ii) the lesser of 0.5 percent of the parties' combined turnover or 0.5 percent of their combined assets in the COMESA region.
  • The CCC will normally complete their review of notified mergers within 120 working days from the date of filing. The CCC has the power to ask for an extension of the review period.

 The substantive test for review of mergers is three-pronged: 

  • Whether the merger is likely to "substantially lessen competition". Under the test, the CCC considers the levels of concentration and of rivalry between the merging companies and their competitors over time, ease of entry, history of collusion and other factors.
  • A balancing test to determine whether the merger's benefits will outweigh its anti-competitive effects.
  • Whether the merger can be justified on public interest grounds.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.