On 3 May 2019, the Securities and Exchange Commission (SEC) and the Federal Competition and Consumer Protection Commission (FCCPC) jointly issued a notice termed "Joint Advisory and Guidance on Mergers, Acquisitions & Other Business Combinations Notifications" (Joint Advisory). The Joint Advisory states that FCCPC and SEC would jointly review all notifications of mergers and other business combinations until further notice.
In January 2019, the president signed the Federal Competition and Consumer Protection Act ("the Act" or "FCCPA") into law. Section 3 of the Act establishes the FCCPC mandating it to review all mergers and business combinations in Nigeria.
Prior to the enactment of the FCCPA, the SEC was responsible for reviewing notification of mergers pursuant to the Investment and Securities Act (ISA). However, the establishment of the FCCPC has discontinued SEC's role in this regard. The FCCPA also mandates the FCCPC to set, gazette and publish thresholds applicable to mergers and other business combinations. Although the Joint Advisory states that the FCCPC has begun this process, the FCCPC is yet to publish any gazette or threshold in this regard and this has generated uncertainty as to the process for notification and review of mergers and other business combinations.
In a bid to address this issue, the SEC and FCCPC have now issued a Joint Advisory stating that both bodies would jointly review all notifications and filings and the FCCPC would convey the decision of such reviews until otherwise discontinued by any further advisory or guidance.
The Joint Advisory also states that:
- The SEC regulations, guidelines and fees, which were in place prior to the enactment of the FCCPA, would apply to all pending and subsequent merger transactions until further notice;
- All notifications for mergers are to be filed at the FCCPC office or at SEC/FCCPA Interim Joint Merger Review Desk;
- All applicable fees are to be paid to the FCCPC;
The issuance of the Joint Advisory by SEC and FCCPC has provided some clarity on the process for executing merger transactions in the intervening period to the full implementation of the FCCPA. Thus, although the FCCPA provides for the supremacy of its provisions over other laws, the SEC rules and regulations on mergers and other business combinations would remain applicable in the interim until further notice.
While we await the publication of further guidelines and thresholds, business entities that have pending merger applications or intend to apply for mergers are advised to engage their consultants to obtain professional guidance in order to effectively navigate through the hurdles surrounding merger applications in Nigeria.
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