Cross-Border M&A: Navigating Competition Law Clearances
Understanding merger control timelines and substantive tests across multiple East African jurisdictions is critical to deal execution and certainty.
By Reuben Mburu
Cross-border transactions in East Africa increasingly trigger merger notification requirements in multiple jurisdictions, creating coordination challenges and timing risk. This article examines key considerations for structuring transactions to manage regulatory approval processes.
Multi-Jurisdictional Filing Requirements
Transactions meeting financial thresholds in Kenya, Tanzania, Uganda, or Rwanda may require separate filings with each jurisdiction's competition authority. Thresholds vary by jurisdiction and are based on turnover or asset values of the parties and their affiliates.
The East African Community Competition Act provides for regional merger control, though national regimes currently take precedence. Parties should assess both national and potential regional filing obligations.
Timing and Process Considerations
Statutory review periods differ across jurisdictions, ranging from 60 to 120 days depending on complexity. Authorities may issue requests for additional information, extending timelines. Some jurisdictions permit early engagement, which can streamline the process.
Deal documentation should account for regulatory timing risk through appropriate longstop dates, reverse break fees, or hell-or-high-water provisions depending on parties' risk allocation preferences.
Substantive Assessment
Competition authorities assess whether transactions may substantially prevent or lessen competition. Analysis focuses on market definition, market shares, barriers to entry, and competitive effects.
Parties should prepare economic analysis supporting their market definition and competitive impact assessment, anticipating potential authority concerns and preparing remedies where necessary.
Strategic Approach
Early identification of filing requirements, parallel preparation of submissions, and proactive engagement with authorities can significantly reduce transaction risk. Parties should build regulatory approval processes into deal timelines from the outset rather than treating them as post-signing formalities.
Each transaction raises unique issues requiring jurisdiction-specific analysis. This article provides general guidance only.