South Africa: COMESA Competition Commission Clarifies Approaches – Merger Assessment Guidelines Published

Last Updated: 10 February 2015
Article by Lee Mendelsohn, Lizel Blignaut and Lameez Mayet

Most Read Contributor in South Africa, September 2018

The much anticipated COMESA Merger Assessment Guidelines (the "Guidelines") were published by the COMESA Competition Commission (the "Commission") on 31 October 2014. The Guidelines do not amend the COMESA Competition Regulations (the "Regulations"), but bring some clarity and greater certainty as regards the Commission's interpretation and application of the Regulations. Overarchingly, the Guidelines demonstrate the Commission's commitment to a practical approach to the merger review process and to substantive assessment principles in line with internationally accepted best practice.

COMESA – the Common Market for Eastern and Southern Africa – was established in order to facilitate the region's sustained development through economic integration and is a free trade area comprising 19 member states, including Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe (the "Member States"). An important part of this economic integration is the promotion of competition and a common approach to competition regulation in the region.

The Regulations established a supranational competition regulatory regime, with powers to promote and encourage competition in the common market by establishing, amongst others, a merger review regime to screen mergers for potential anti-competitive and other effects in the common market. As with any new regime, some aspects required clarification and review, for example in this case because the merger thresholds are set at zero.

Properly implementing the Regulations has, since publication, been difficult. In particular, the jurisdictional aspect of the merger notification regime gave rise to some confusion. Read with the Regulations in their entirety, a transaction must meet four conditions to be notifiable to the Commission: first, satisfy the definition of a 'merger', being the "direct or indirect acquisition or establishment of a controlling interest ... in the whole or part of the business ... of (an)other person"; second, fall within the jurisdiction of the Regulations in that it should comprise economic activity within or having an effect within the Common Market and (arguably) also be capable of having an appreciable effect on trade between Member States and be capable of restricting competition; third, have a regional dimension in that "both the acquiring firm and target firm or either the acquiring firm or target firm operate in two or more Member States"; and fourth, meet the monetary thresholds.

The uncertainty regarding the jurisdictional aspect arose from the Commission's public position that an assessment by merging parties as to whether a transaction is capable of having an appreciable effect on trade between Member States and a restrictive effect on competition is not appropriate and that merging parties must approach the Commission to make such determination. To this end, the Commission in March 2014 informally introduced a "comfort letter" process, whereby merging parties may approach the Commission with a "bare" merger filing setting out the salient facts and effects of the merger and may seek from the Commission a comfort letter indicating that it does not require the transaction to be notified and assessed.

The Guidelines formalise this comfort letter process and importantly state that merging parties "may request a comfort letter determining that a merger is not a notifiable merger because it would not have an appreciable effect on trade between Member States or restrict competition in the Common Market".

With the Guidelines the Commission has created a process to relieve parties of an onerous merger regulation burden, but it has also created a curious position for itself. The Commission has publicly stated that there appears to be no jurisdictional requirement that a transaction has an appreciable effect on competition in or trade between Member States and it therefore does not accept that parties are permitted to evaluate the economic effects of their transactions and, if they (the parties) conclude that a transaction will not result in an appreciable effect on competition in or trade between COMESA Member States, to conclude that there is no requirement to notify the Commission. That said, the Commission seems now to state through the Guidelines that if IT (the Commission) concludes that a transaction will not result in an appreciable effect on trade between Member States or competition in the common market, then it will certify that the transaction is not notifiable (that the Commission does not have jurisdiction).

Receiving this comfort letter is fundamentally different from the Commission approving a transaction. Through the comfort letter process the Commission is seemingly disavowing jurisdiction. That seems to us only to be possible if a jurisdictional requirement does exist that for a transaction to be notifiable such transaction must be capable of having an appreciable effect on competition or on trade between COMESA Member States.

In our view, the uncertainty is easily remediable - with no loss of jurisdiction and no concession by the Commission – if the Regulations are amended such that, instead of a comfort letter, the Commission were simply to approve such non-contentious mergers on a fast track and "bare" merger filing basis, and not extract a filing fee from the parties.

It seems to us that such an approval process could satisfy the Commission's requirements without being overly onerous on merging parties.

The Guidelines furthermore introduce an objective test to determine whether the regional dimension of a merger transaction is met (the third condition of a notifiable merger transaction as set out above). With regard to the interpretation of the word "operate", the Guidelines set a safe-harbour threshold that an undertaking "operates" in a Member State only if its annual turnover or value of assets in that Member State exceeds US $5 million. In addition to clarifying the meaning of "operate", the Commission has clarified that a target undertaking must operate in at least one Member State and not more than 2/3 of the annual turnover in the Common Market of each of the merging parties must be achieved or held within one single Member State for the regional dimension requirement to be met.

A final note regards the fact that the Guidelines remain just that – guidelines. The law as previously promulgated stands and the Guidelines are at best an attempt by the Commission to clarify its practical interpretation and application of the Regulations.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions