Nigerian Federal Competition and Consumer Protection Commission guidelines on foreign-to-foreign mergers
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Tiwalola Osazuwa
AELEX, Lagos, Nigeria
Damilola Ogedengbe
AELEX, Lagos, Nigeria
Introduction
On 13 November 2019, the Federal Competition and Consumer Protection Commission (the ‘Commission’) issued the Guidelines on Simplified Process for Foreign–to-Foreign Mergers with Nigerian Component (the ‘Guidelines’). The Guidelines were issued pursuant to the powers granted to the Commission under the Federal Competition and Consumer Protection Act 2019 (FCCPA), which was enacted in February 2019.
Under the FCCPA, a merger will have occurred where one or more undertakings directly or indirectly acquire or establish direct or indirect control over the whole or part of the business of another undertaking. It may be achieved through (1) the purchase or lease of shares, an interest or assets of an undertaking; (2) the amalgamation or other combination with an undertaking; and (3) a joint venture.
The Guidelines were issued pursuant to the provisions of Section 2(3)(d) of the FCCPA, which extended the application of the FCCPA to ‘… the acquisition of shares or other assets outside Nigeria resulting in the change of control of a business, part of a business or any asset of a business, in Nigeria’. In essence, any foreign-to-foreign merger that results in a change of control of a Nigerian business will come under the Commission’s regulatory purview. Prior to the enactment of the FCCPA, this was not the case.
Key highlights
Key highlights of the Guidelines are as follows:
The application fee is based on the turnover of the Nigerian business:
Parties are not required to pay a processing fee in addition to the application fee, as is the case for local mergers. For local mergers, processing fees are usually a percentage of the value of the transaction.
The documentation requirements are less elaborate than for local mergers. The only documents specified in the Guidelines are an information memorandum showing the effect of the transaction on the Nigerian market, the relevant agreement(s), authorisations for external representatives, financial information and a summary of the transaction for publication by the Commission.
An expedited procedure has been introduced, by which the Commission is expected to conclude its review of the transaction and issue a decision within 15 business days. The expedited procedure fee is NGN 5m (five million Naira) (about US$13,889) which is to be paid in addition to the application fee.
The parties to the transaction are required to provide a power of attorney granting authority to their external representative(s) to undertake the necessary filing/notification to the Commission.
The parties are required to provide a non-confidential summary (of no more than 500 words) of the merger, which would be published by the Commission upon notification.
In the event that information to be disclosed is of a confidential nature or contains business secrets, the Guidelines make provision for the submission of such information under separate cover and along with acceptable reasons for non-disclosure.
Submissions must contain a declaration by the notifying party(ies) stating that information provided in the submission is true, correct and complete.
[2] The equivalent of about US$2,777,778.
[3] The equivalent of about US$1,388,889.
[4] The equivalent of about US$5,555.
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