Merger Control In Nigeria: The Sorting Exercise

Part 1 of a three-part series on merger approval in Nigeria.

Introduction

There is no distinct code of “merger law” in CAMA 2020 and ISA 2025. These Acts only include a facility for effecting a scheme of arrangement, compromise, take-overs or reconstruction in Chapter 27 of the CAMA 2020 and Part XII of the ISA 2025, as a court driven procedural mechanism that a company may use to reorganize its share capital, compromise with creditors, or transfer its undertaking to another company in pursuance of a scheme proposed for a compromise, arrangement or reconstruction between two or more companies or the merger of any two or more companies.

Section 92(1) of the FCCPA 2018, by contrast, provides that a merger occurs when one or more undertakings directly or indirectly acquire or establish direct or indirect control over the whole or part of the business of another undertaking, and that such a merger may be achieved in any manner, including through the purchase or lease of the shares, an interest or assets of the other undertaking in question, the amalgamation or other combination with the other undertaking in question, or a joint venture.

The word “merger” appears in section 711 in a seemingly casual manner as a potential result of a scheme of arrangement, but CAMA does not define it. The statute is really a device of company law which deals with the internal reorganization of corporate rights and liabilities between a company and its members, debenture holders and creditors. It is not a device of market regulation which deals with the effect of a combination on competitors, customers or the structure of an industry. The function of the CAC in an M&A process is essentially administrative, for registration and not evaluative.

Essentially, the CAC registers the incidental corporate consequences of special resolutions for a merger altering share capital, allotments of new shares to effect consideration, changes to the memorandum and articles, and, where applicable, the striking off or dissolution of the transferor company. It registers the court order sanctioning the scheme, registers the resulting changes to the corporate constitution and share register, and acts as the public repository of the transaction’s documentary trail. It is not responsible for whether a combination will harm competition, raise prices or foreclose rivals; for the definition of the relevant market within which the parties compete; or for any statutory mandate to prohibit a transaction, impose structural remedies such as divestitures, or accept behavioural undertakings.

The Position before the FCCPA

Nigeria’s pre-2019 law was not silent on competition. Section 121 of the Investments and Securities Act 2007 required the Securities and Exchange Commission to determine whether a merger was likely to substantially prevent or lessen competition, and where it so found, to weigh efficiency gains and public interest justifications against that harm. The defect lay not in the absence of the test but in where it sat and how far it reached: a capital markets regulator, applying a competition standard to transactions selected by corporate form and listing status rather than by economic effect, without economy-wide jurisdiction and without the economic capability the standard demands.

The scheme of arrangement under CAMA provided a mechanical route for two companies to combine, with the Federal High Court sanctioning the scheme and the CAC registering the resulting order and constitutional changes. The SEC, acting primarily under the Investments and Securities Act, exercised a supervisory role over mergers, acquisitions and business combinations involving public companies, a role concerned chiefly with capital-market integrity, valuation fairness and the protection of minority and public shareholders for example, ensuring dissenting shareholders were fairly compensated under a squeeze-out rather than with the economy-wide assessment of competitive effect. Other sector regulators, the Central Bank of Nigeria for bank mergers, the Nigerian Communications Commission for telecommunications combinations, the National Insurance Commission for insurance mergers, approved combinations within their respective sectors based on prudential, licensing and sector policy considerations.

The Federal Competition and Consumer Protection Act 2018 did not invent merger control in Nigeria. It repealed the relevant provisions of the ISA 2007, relocated the competition assessment to a dedicated authority, and redefined its reach by reference to the fact of a change in control, however achieved. The Investments and Securities Act 2025 completed the settlement by restoring to the SEC the function it was always institutionally suited to perform, shareholder fairness and disclosure in public company transactions, while leaving the competition assessment with the Commission.

The Improvement the FCCPA Regime Provides

The Merger Review Regulations make this corrective purpose explicit in their design. They require the FCCPC to define the relevant product and geographic market in which the merging parties compete, using the small but significant non-transitory increase in price test borrowed directly from mainstream competition economics; to measure market concentration using market shares and the Herfindahl-Hirschman Index, with defined numerical thresholds that trigger closer scrutiny; and to assess barriers to entry and expansion, the countervailing power of buyers, the failing firm defence, the effect of actual or potential import competition, and the presence of a particularly vigorous or innovative competitor whose removal would itself harm competition.

They further require the Commission to distinguish and separately analyse unilateral, coordinated, and vertical or conglomerate theories of harm; to weigh efficiencies and public-interest considerations against any identified competitive harm; and, where a transaction is found likely to substantially prevent or lessen competition, to impose structural remedies such as divestiture, impose behavioural remedies, or prohibit the transaction outright, with the further power to compel the unwinding of a merger consummated in contravention of the standstill obligations.

This apparatus market definition, concentration thresholds, theories of harm, efficiency and public-interest offsets, structural remedies and the power of prohibition had no institutional home in Nigeria before 2019. The standard existed on the statute book. What did not exist was a body constituted to apply it across the economy.

Were These Defects and Gaps Curable Within CAMA?

It is worth confronting the question directly could the CAC, acting under an amended CAMA, have cured this itself, without creating a wholly new commission? As a matter of pure legislative technique, the legislature could, in principle, have grafted a competition-review chapter into the CAMA and directed the CAC to apply it. But for sound regulatory design, the answer is that these defects were not realistically curable within the CAMA or CAC framework, for reasons that go beyond drafting convenience.

First, an institutional mandate problem. The CAC is constituted, staffed and funded as a companies registry, an institution whose statutory purpose is to incorporate companies, maintain the register of companies and their constitutional documents, and register post-formation events. Its institutional culture, its personnel, company-law registrars and examiners, and its performance metrics are all oriented toward the accuracy and timeliness of registration, not toward the forward-looking economic prediction that competition analysis demands. Grafting a competition-assessment function onto a registry is not merely adding a new form to the counter; it requires an entirely different professional competence, economists capable of estimating cross-price elasticity, defining relevant markets and modelling unilateral and coordinated effects, which a company’s registry has no institutional reason to have developed and no natural professional pipeline into.

Second, a conflict of functions problem. CAMA’s procedural arrangement is triggered by the parties, sanctioned by the Court, and merely registered by the CAC. To convert the CAC into a competition regulator would require either displacing the Federal High Court’s sanctioning role with an administrative determination by the CAC, a significant and awkward reallocation of judicial power to an executive registry, or requiring the CAC to conduct a parallel competition assessment alongside its registration function for every scheme of arrangement, effectively duplicating within one agency two functions that are conceptually and procedurally very different, and that in comparative competition-law practice are consistently allocated to a dedicated competition authority rather than a company registry.

Third, a jurisdictional scope problem. This is the most fundamental because Chapter 27 of CAMA applies only where the parties choose to combine by that particular court-sanctioned route, whether by scheme, compromise, or reconstruction. It has never applied to, and could not readily have been extended to capture, the very large category of combinations effected by ordinary share or asset acquisition without any scheme of arrangement at all, the paradigm case being a straightforward share purchase agreement conferring control. Since a change of control by simple share acquisition raises the same competitive concerns as a change of control by scheme of arrangement, any merger-control regime confined to Chapter 27 would necessarily have left the greater part of the merger universe outside its reach. This is precisely why the Merger Review Regulations define jurisdiction functionally, by reference to the fact of a change in control, however effected, rather than by reference to any particular corporate-law mechanism. That functional, mechanism-agnostic jurisdictional test could not have been achieved by amending a chapter of CAMA that is, by its own terms, confined to one transactional mechanism.

For these reasons, the 2018 Act moved the competition question to a body built for it, the 2025 Act returned the investor protection question to the body built for that, and the present architecture is the end of a sorting exercise rather than the sudden arrival of merger control.

Where the Sorting Stopped

A principle is embedded in that history, and it is worth stating plainly. Competition assessment belongs with a body whose jurisdiction is defined by economic effect, not by the class of entity it supervises. That is why the assessment could not remain with the SEC, a regulator defined by listing status, and why it could not go to the CAC, a regulator defined by corporate form.

The principle has not been carried through. Section 65 of the Banks and Other Financial Institutions Act 2020 leaves the competition review of bank mergers with the Central Bank of Nigeria. Section 90 of the Nigerian Communications Act 2003 preserves the Nigerian Communications Commission’s oversight of competition in the communications market.

The Central Bank does not ask economic questions about banks. It asks regulatory ones: capital adequacy, the fitness and propriety of the acquirer, systemic stability, the integrity of the licensing regime. Those are the right questions for a prudential supervisor to ask, and they are not the question whether a combination will substantially lessen competition in a Nigerian market. The pitfall the 2018 Act was enacted to avoid, a competition standard administered by an institution constituted to ask something else, has therefore reproduced itself in the banking sector, and in the communications sector alongside it. The reform corrected the capital-markets regulator and stopped.

The Remedy is Concurrence, not Transfer

The answer is not to strip the sector regulators of their role. Their questions are legitimate and must continue to be asked by the bodies equipped to ask them. The answer is that the competition question should not exit the FCCPC at all.

Two structures would achieve this. The Central Bank could establish a dedicated unit within its own supervisory architecture staffed to conduct competition analysis. Better, the FCCPC and the Central Bank could jointly establish a banking sub-unit in which prudential and competition assessments are conducted side by side, each by the institution competent to conduct it. The same model applies to the Nigerian Communications Commission and the communications market.

This produces a double cadre of questions about a single transaction. The sector regulator resolves the regulatory and compliance issues. The competition authority resolves the market-effect issues. Neither displaces the other, and neither is asked to perform an assessment it was not constituted to perform.

It will be asked which clearance prevails where the two do not align. The question does not arise, because the two are not answering the same question. Precedence is a problem only where two authorities compete on the same ground, and these do not.

Each is, moreover, structurally incapable of absorbing the other’s function. The Central Bank may attempt an economic assessment and, in an individual case, reach a defensible conclusion, but a capability not built into an institution cannot be sustained across a caseload. Equally, the competition authority is staffed by economists reasoning about market structure and the macroeconomic consequences of concentration. Banking demands a different order of precision, the accounting detail, the capital treatment, the prudential surgery involved in combining two balance sheets, and that is not a competence the Commission was engineered to hold. Each body would do the other’s work badly, and the failure would not be occasional but systematic.

Both approvals are therefore required and essential on their own terms. A merger that is prudentially sound may still inflict adverse economic effects, and a merger that raises no competition concern may still be prudentially unsafe. The statutory architecture already accommodates this: section 105 of the FCCPA provides for concurrent jurisdiction and for cooperation between the Commission and sector regulators. The reform needed is not legislative. It is that the concurrence the statute already contemplates should operate in fact.

Part 2 examines how the resulting architecture operates in practice, and what a transaction party should do while the question remains open.

References

1. Adams Hayes (2026) “Understanding Mergers and Acquisitions: Types and Valuations” <https://www.investopedia.com/terms/m/mergersandacquisitions.asp#toc-understanding-mergers-vs-acquisitions> visited on the 22nd July 2026.
2. Companies and Allied Matters Act, 2020, Part XXVII (sections 710–719).
3. Federal Competition and Consumer Protection Act, 2018, Part XII (sections 92–105).
4. Federal Competition and Consumer Protection Commission, Merger Review Regulations, 2020
5. Investments and Securities Act, 2007
6. Investments and Security Act, 2025 Part XII Section 140 – 149
7. Jide Alia, PUNCHNG, “Premium, Trustfund pensions proposed Merger” <https://punchng.com/premium-trustfund-pensions-propose-merger/> visited on the 27^th July 2026.
8. Nigerian Communications Act, 2003, section 90
9. Nigerian Communications Commission, Competition Practices Regulations, 2007, regulation 26.
10. Omaplex (2026) “mergers and acquisitions legal insights and strategies for successful corporate consolidation” <https://omaplex.com.ng/mergers-and-acquisitions-legal-insights-and-strategies-for-successful-corporate-consolidation> visited on the 22^nd July 2026.
11. UBA v FCCPC (FHC/ABJ/CS/1972/2025)
12. Wireless Application Service Providers Association of Nigeria Ltd/Gte v. FCCPC

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