Africa Bulletin

This Africa Bulletin outlines in brief a few of the recent legislative, constitutional and commercial developments in Africa during the first half of 2013.

With the increased and increasing investor appetite for Africa (driven by and reflected in the forecasted growth for the region—the World Bank's latest estimates are that growth should reach five percent by 2015), there is a continual evolution of the legislative position of African nations that, when overlapped with the ever-changing political landscape, produces a hugely exciting commercial environment, albeit one in which an investor needs to constantly have his or her fingers on the pulse.

New Merger Control Filing Regime in African COMESA

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...