As Morocco steps up its merger control enforcement, businesses are increasingly grappling with the country's evolving local nexus test. Introduced in the 2023 Moroccan Merger Guidelines, this test determines whether a transaction must be notified to the Moroccan Competition Council (MCC). While it grants the MCC flexibility to assert jurisdiction, it also introduces uncertainty—raising compliance costs and risk for companies operating across borders.
Below, we unpack the MCC's current approach, what recent enforcement practice reveals, and what businesses need to know when assessing Moroccan filing obligations.
Understanding the Local Nexus Requirement
Under Moroccan law, a concentration must be notified to the MCC if it meets financial thresholds and may affect competition in Morocco. The latter requirement—known as the "local nexus"—is where the complexity begins. The 2023 Guidelines expanded on this test but intentionally kept its application flexible, providing few hard rules.
The MCC distinguishes between transactions where the target meets the Moroccan turnover threshold (in which case a filing is always required) and those where the acquirer does. If only the acquirer meets the threshold, then the target must have a meaningful link to Morocco. What qualifies as "meaningful" is left open to interpretation, forcing deal teams to analyze each case closely.
Target Turnover: No Bright-Line Rule
Turnover remains a key indicator—but not a definitive one. The Guidelines do not set a minimum Moroccan revenue threshold for the target. This omission is deliberate and gives the MCC wide latitude. However, recent cases provide a glimpse into the Council's thinking.
In one review, the MCC concluded that a one-time sale generating approx. USD 100,000 in Moroccan revenue did not establish a sufficient nexus.
In another, sales of around USD 130,000 were also deemed insufficient.
These examples suggest that not all revenue in Morocco will trigger filing obligations, even if the acquirer meets the jurisdictional thresholds. That said, the MCC emphasized that these were case-specific assessments, and outcomes could vary based on broader commercial context.
Legal Relationships: Unclear, but Potentially Decisive
Another way the MCC may establish nexus is through a "legal relationship" between the target and Morocco. This term is not defined in detail, but recent practice offers limited guidance:
A registered Moroccan entity, branch, or representative office is considered a sufficient legal relationship.
Whether dormant entities, staff operating in Morocco without a corporate presence, or IP rights (like trademarks or patents) registered locally could also meet this standard remains uncertain.
There are also unconfirmed suggestions that minority Moroccan shareholders in the target could be enough to create nexus—posing challenges in transactions involving public companies or investment funds where shareholder details may not be easily traceable.
Vertical and Horizontal Relationships: Still Developing
The Guidelines also state that horizontal or vertical commercial relationships between the target and Morocco may establish nexus—but provide no detailed explanation. Here's what we know:
Horizontal links might refer to cases where the acquirer is active in Morocco in the same global market as the target, even if the target itself has no local presence.
Vertical links are slightly more clarified through enforcement practice. The MCC has taken the position that a target procuring supplies from Moroccan companies may have sufficient local nexus—even if it is not directly active in the country.
Still, the scope and threshold of these relationships remain vague. For example, it is unclear whether one-off purchases are enough or whether an ongoing commercial relationship is required.
Open-Ended Criteria: A Catch-All Tool
The Guidelines also include an open-ended category for other potential links that may establish local nexus. No concrete examples have been provided so far, but this provision may allow the MCC to assert jurisdiction over transactions that create indirect or structural effects on Moroccan markets. Until further guidance emerges, this remains speculative—but relevant to any risk assessment.
The Enforcement Landscape Is Shifting
Importantly, this debate is not academic. The MCC has demonstrated a growing willingness to enforce merger control rules—especially in foreign-to-foreign transactions.
In one notable case, the MCC fined Viatris Inc. 2.5% of its 2023 Moroccan turnover for failing to notify a merger that had formed the company.
The MCC also fined Sika AG for failing to notify its acquisition of Dry Mix Solutions SAS, a French company, again despite the lack of direct Moroccan operational overlap.
Since 2023, the MCC has also moved away from its historically lenient approach to gun jumping violations. Whereas the Council previously allowed for the summary settlement of past issues, it now requires normalization of each violation individually before a pending filing can proceed.
In several recent cases, the MCC has even delayed clearance of new transactions until the parties resolved earlier failures to notify unrelated deals.
Implications for Dealmakers
Given the lack of concrete thresholds and the MCC's increased scrutiny, parties involved in cross-border M&A should adopt a cautious and proactive approach when evaluating potential Moroccan exposure.
We recommend the following:
Assess Moroccan Nexus Early: If only the acquirer meets the threshold, scrutinize the target's legal, commercial, and financial ties to Morocco. Where facts are ambiguous, document the rationale thoroughly.
Be Prepared to File: Even where turnover appears modest, be prepared for the MCC to assert jurisdiction if other ties exist.
Don't Assume Past Silence Implies Approval: The MCC is now investigating and penalizing historic non-notified transactions. Any upcoming deal that requires Moroccan review may trigger retrospective questions.
Expect Delays if Past Issues Are Unresolved: If the MCC discovers past violations during review of a new deal, clearance may be withheld until those violations are remedied.
Conclusion: Clarity Through Caution
The Moroccan Competition Council has intentionally kept its local nexus test broad and flexible, giving itself the discretion to evaluate deals based on real-world impact rather than rigid formulas. While this approach supports case-by-case analysis, it also creates uncertainty for dealmakers.
In this environment, compliance depends not on bright-line rules, but on reasoned judgment. A thorough, well-supported nexus analysis—backed by recent MCC practice—can mitigate the risk of penalties, prevent delays, and preserve deal timelines.
At Bremer, we help clients manage these risks by providing clear, jurisdiction-specific merger control guidance across the MENA region. Our team in Morocco and across our offices is equipped to support cross-border deal activity, merger filings, and interactions with local competition authorities.
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.
