East African Community Starts Enforcement Of Their Cross-Boarder Merger Control Regime

The East African Community (EAC)—the regional economic community made up of Burundi, the Democratic Republic of Congo, Somalia, Kenya, Rwanda, South Sudan, Tanzania, and Uganda—start enforcing their merger control regime on 1 November 2025. The regime will be administered by the East African Community Competition Authority (ECCA). The new regime requires the notification of mergers that have a cross-boarder effect in the EAC and meet certain turnover thresholds.

Mergers within the meaning of the East African Competition Act, 2006 as amended by the East African Community Competition (Amendment) Act, 2023 are direct or indirect acquisitions of shares, businesses, or other assets, whether inside or outside the EAC region, that result in a change of control over an undertaking or part thereof, or assets of a business in the EAC, in any manner including takeovers. Acquisitions within the meaning of this provision are direct or indirect acquisitions of control over the whole or part of one or more undertakings, whether through merger, consolidation, takeover, purchase of securities or assets, contract, or other means.

Hence, while the EAC merger control regime applies to foreign-to-foreign transactions, they appear to have to have a local effect inside the EAC region to trigger a filing obligation. Per the definition of a notifiable merger provided by the EAC Competition Act, a notification may be triggered by transactions outside of the EAC regions. Still, to require notification, they must lead to change of control over an undertaking in part or as a whole or business assets in the EAC region. This appears to establish some form of local nexus test. What appears to be clear is that change of control over assets located within the EAC region requires notification. Still, what remains unclear is what would constitute change of control over an undertaking—or part therefore—in the ECA region. The ECCA has to date not clarified whether this would require the target to have subsidiaries, branches, or other representation in the ECA region or whether target activities in the EAC region—e.g. sales in the EAC region through exports—would suffice to meet the local nexus test.

The EAC Competition Act defines control as the right of an undertaking to exercise restraint or direction over another undertaking and includes beneficial ownership of more than half of the issued capital, business or assets of another undertaking, the ability to appoint or veto the appointment of more than half of the members of the board of directors or similar body of the other undertaking, and the potential or actual ability to materially influence the business policy and operations of the other undertaking irrespective of the size of ownership change. The EAC Competition Act goes on to clarify that control encompasses situations where an undertaking can determine strategic commercial decisions, exercise decisive influence over management or policy, or secure a controlling interest through ownership, contractual rights or other arrangements. However, the EAC Competition Act does not provide specific thresholds or criteria for what would be considered material influence within the meaning of the Act.

Pursuant to the EAC Legal Notice EAC/191/2025 transaction require notification to the ECCA where the transaction has a cross-border effect in the EAC, and meets the notification threshold. A transaction is considered to have a cross- boarder effect in the EAC, if it involves undertakings operating in at least two EAC Member Countries. The Legal Notice does not specify whether the target must be one of the parties that operates in more than one EAC Member Countries.

Where the transaction has a cross-boarder effect the EACCA must be notified of the transaction prior to closing, if:

• the combined turnover or assets of the transaction parties within the EAC region is at least USD 35 million; and
• at least two of the parties have turnover or assets of at least USD 20 million within the EAC region, unless each of the parties achieves at least two-thirds of its aggregate EAC turnover or has at least two-thirds of its EAC assets in within one single EAC Member Country.

The procedure for making a notification under the EAC merger control regime is set out in the EAC Competition (Mergers and Acquisitions) Regulations, 2025. Pursuant to the regulation, the review process is structured in two phases, comprising of a preliminary assessment of the transaction to determine if it raises competition concerns, followed by a more detailed investigation where a transaction may significantly impede competition. The regime is suspensory and transactions may not be closed prior to approval and clearance by the ECCA.

Where a notification is made to the ECCA, no filing to the competition authorities of the EAC Member Countries must be made, according to EAC Legal Notice EAC/191/2025. This one-stop- shop principle has not been tested to date, and the EAC Member Countries have not voiced their position on this matter so far. Considering the push back of national regulators in respect to similar one-stop-shop principles under other regional merger control regimes in Africa such as the COMESA and the ECOWAS regimes, parties are well advised to be cautious of EAC Member Countries possibly asserting authority to review transactions, even where a filing is made to ECCA, until the member countries clarify their position.

The filing fee applicable for a notification is calculated based on the aggregate value of assets or turnover—whichever is higher—subject to the transaction. To date the ECCA has not provided clarification on how this would be calculated. It stands to reason that in an acquisition the filing fee would be calculated based on the assets or turnover of the target and in a merger it would be calculated based on the assets or turnover of the merging entities. However, for lack of official guidance ambiguity remains. In particular, in respect to joint venture transactions. It remains unclear whether the filing fee would be calculated based on the assets or turnover of the business contributed to the joint venture or whether the assets and turnover of all joint venture parties must be considered.

The filing fee is determined based on thresholds. Where the aggregated assets or turnover— whichever is higher—subject to the transaction is between USD 35 and 50 million, the filing fee is USD 45,000; where it is between USD 50 and 100 million, the filing fee is USD 70,000; and where it is above USD 100 million, the filing fee is USD 100,000.

The entering into force of the EAC merger control regime marks another add on to the already complex African merger control landscape. Following the ECOWAS merger control regime that became operational in October 2024, the EAC joint several supra-national regime that parties must consider when contemplating transactions on the continent. This, paired with increasingly aggressive enforcement by national regulators, makes navigating transactions in Africa challenging. In addition, the residual ambiguity due to the novelty of the EAC regime and other merger control regimes on the continent, requires parties to maintain close communication with several authorities to adequately assess their obligations.

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