HB Senekal and Lameez Mayet of ENSafrica look at COMESA merger regime monetary thresholds
Update: kindly note that COMESA has now taken the view that the approval of the amendments by the Board brings the amendments into effect on the date of such approval, being 26 March 2015.
Mr Willard Mwemba, the Head of Mergers and Acquisitions for the COMESA Competition Commission (“CCC”) has confirmed that COMESA will introduce amended rules to the COMESA Competition Regulations (the “Amendment”), which will establish monetary thresholds for merger notifications and lower merger filing fees. The Amendment brings about significant relief and certainty to firms doing business in the COMESA Common Market (the “Common Market”) and is imminently due to come into effect.
Prior to the Amendment, the monetary thresholds for merger notifications for transactions in the Common Market are set at zero. Mr Willard Mwemba explained that the monetary thresholds will, post the Amendment, only be met where the combined annual turnover or value of assets (whichever is higher) of the merging parties in the Common Market equals or exceeds US$50 million and where each of the merging parties have an annual turnover or asset value in the Common Market of at least $10 million.
In addition to the above, the Amendment brings about a significant reduction in merger filing fees. The filing fee, prior to the Amendment, is calculated at 0.5% of the combined annual turnover or combined asset value (whichever is higher) of the merging parties in the Common Market, capped at a maximum fee of US$500 000. The filing fee post the Amendment is to be calculated at 0.1% of the combined annual turnover or combined asset value (whichever is higher) of the merging parties in the Common Market, capped at a maximum fee of $200 000.
The Amendment will be published in the Official Gazette for COMESA. It will become effective on the appointed effective date, which must be published in that same Gazette. Mr Willard Mwemba was unable to indicate when such date would be. ENSafrica will provide updates in this regard as soon as more information becomes available.
*COMESA is the Common Market for Eastern and Southern Africa. COMESA comprises the following Member States: Burundi, Comoros, D.R. Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.