Technology M&A Comparative Guide

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1. Legal and regulatory framework

1.1 Which legislative and regulatory provisions govern M&A activity in your jurisdiction?

M&A activities in Nigeria are governed by a mix of corporate, competition, securities and sector-specific laws. The principal legislative and regulatory provisions include the following:

• Companies and Allied Matters Act (CAMA) 2020: CAMA provides the legal foundation for corporate restructuring in Nigeria, including:
• • share transfers;
  • amalgamations;
  • mergers; and
  • schemes of arrangement.
• It outlines the procedures for obtaining shareholder and creditor approvals and, where applicable, court sanctions (particularly under Part XIII, Sections 711–716). CAMA also governs post-transaction changes in company structure and shareholding.
• Federal Competition and Consumer Protection Act (FCCPA) 2018: The FCCPA is the primary legislation for merger control in Nigeria. It empowers the Federal Competition and Consumer Protection Commission (FCCPC) to review and approve mergers, acquisitions and similar combinations that meet financial thresholds. The FCCPC:
• • assesses whether a transaction may substantially lessen competition; and
  • must approve all qualifying mergers before they can be implemented.
• Its powers override conflicting laws on competition matters.
• Investments and Securities Act (ISA) 2025 and Securities and Exchange Commission (SEC) Consolidated Rules and Regulations as at 2013 (with sundry amendments as of 23 December 2024, made pursuant thereto) ('SEC Rules'): The ISA provides the statutory framework for regulating capital market transactions, including M&A deals involving public companies. The SEC:
• • regulates takeovers, significant share acquisitions and restructurings involving listed entities; and
  • is empowered under the ISA to issue rules and regulations in this regard.
• Nigerian Exchange (NGX) Listing Rules: Publicly listed companies must also comply with the NGX Listing Rules, which require timely disclosure, shareholder approval and regulatory clearance for any deal affecting listing status or shareholder rights.
• Sector-specific regulatory approvals: In regulated industries such as banking, insurance and telecommunications, M&A transactions must also receive approval from the relevant sector regulators. These include, among others:
• • the Central Bank of Nigeria (CBN);
  • the National Insurance Commission (NAICOM);
  • the Nigerian Communications Commission (NCC);
  • the Nigerian Electricity Regulatory Commission (NERC).

1.2 What special regimes apply to technology M&A transactions in your jurisdiction?

There is no standalone legal framework specifically dedicated to technology M&A in Nigeria. However, certain regulatory regimes and considerations apply uniquely or more sensitively to M&A transactions involving technology companies, depending on the nature of the business and the sector in which it operates. Key regimes and issues include the following:

• General merger control: All M&A transactions, including those involving technology companies, are subject to review under the FCCPA. The FCCPC assesses whether such transactions may lessen or prevent competition, particularly:
• • in highly concentrated digital markets; or
  • where data dominance is involved.
• This scrutiny is heightened where a transaction may give rise to market power in the platform services, fintech, digital payments or e-commerce sectors.
• Securities and capital market regulation: Where a technology company is publicly listed or has issued securities to the public, the ISA and the SEC Rules will apply. These include requirements on:
• • public disclosures;
  • fairness opinions; and
  • compliance with takeover or acquisition procedures.
• This is relevant for:
• • late-stage tech companies; or
  • startups approaching public market participation.
• Data protection and privacy: Technology companies involved in M&A often collect and process user data. As such, parties must comply with Nigeria's data protection regime, primarily governed by the Nigeria Data Protection Act, 2023 and the General Application and Implementation Directive 2024, enforced by the Nigeria Data Protection Commission (NDPC). Key requirements in tech M&A may include:
• • notifying the NDPC of any change in data controller or processor status due to the transaction;
  • ensuring a continued lawful basis for data processing post-acquisition; and
  • conducting a data protection impact assessment (DPIA) in some high-risk cases.
• Intellectual property and software licensing: Tech M&A often involves the acquisition of proprietary software, trademarks, patents and other intellectual property. These assets must be carefully evaluated and transferred in accordance with:
• • the Trademarks Act, 2004;
  • the Patents and Designs Act (Chapter 344, Laws of the Federation of Nigeria); and
  • the Copyright Act, 2022.
• Technology transfer: Where a foreign entity is involved, as either buyer or seller, particular attention must be paid to the regulatory role of the National Office for Technology Acquisition and Promotion (NOTAP). Under the NOTAP Act 2004, agreements involving the transfer of technology or intellectual from foreign entities to Nigerian companies – including software licensing, trademark use, technical services, and management contracts – must be registered with NOTAP; otherwise, any profit, royalty or fee due under such unregistered contracts cannot be repatriated to the foreign party through the CBN.
• Fintech and digital financial services: For tech companies operating in the fintech or digital payment space, transactions may be subject to regulatory supervision by multiple agencies. Where the target is licensed to operate payment systems, mobile money or financing platforms, CBN approval may be required. Fintechs offering investment or asset management related products are regulated by the SEC, while those offering insurance-related products may fall under NAICOM's oversight. Regulatory approvals or notifications may be necessary depending on the scope of services and licences held.
• Sector-specific regulation: As an example, where a technology company operates in telecoms or digital communications, the NCC requires prior approval for any transfer of:
• • control;
  • licence rights; or
  • spectrum use.
• This applies to:
• • companies offering Voice over Internet Protocol services;
  • internet service providers; and
  • licensed infrastructure providers

1.3 Which bodies are responsible for supervising M&A activity in your jurisdiction? What powers do they have and what kinds of transactions do these powers apply to?

M&A activity in Nigeria is supervised by multiple regulatory bodies, each with authority over different aspects of a transaction depending on:

• the structure of the deal; and
• the nature of the companies involved.

The FCCPC serves as the primary authority for merger control in Nigeria. Its jurisdiction covers both private and public company transactions that meet certain financial thresholds. Under the Federal Competition and Consumer Protection Act, 2018, the FCCPC is empowered to review transactions to determine whether they are likely to substantially prevent or lessen competition in any relevant market. It has the authority to approve, block or impose conditions on transactions. Its decisions can be based on factors such as:

• market concentration;
• barriers to entry; and
• potential consumer harm.

The FCCPC's powers extend to both domestic and cross-border transactions that have a material effect on competition within Nigeria.

Where a transaction involves a public company or any entity regulated under capital markets law, the SEC becomes the principal supervisor. Following the enactment of the Investment and Securities Act, 2025, the SEC's authority on M&A transactions has been expanded. It is now responsible for reviewing and approving:

• takeovers;
• acquisitions of substantial shareholdings (typically 30% or more); and
• other forms of corporate restructuring involving public companies.

The SEC ensures that such transactions comply with:

• investor protection standards;
• adequate disclosure requirements; and
• fairness obligations.

It may also impose sanctions for failure to comply with applicable rules, including penalties for non-disclosure or misleading statements.

All companies, whether public or private, must comply with corporate formalities under CAMA. The Corporate Affairs Commission (CAC):

• administers CAMA; and
• supervises the implementation of:
• • statutory mergers;
  • share transfers; and
  • schemes of arrangement.

The CAC is responsible for:

• reviewing and registering documents relating to changes in company structure and ownership following a merger or acquisition; and
• certifying certificates to evidence completed corporate combinations.

Its role is essential in finalising the legal effect of any restructuring transaction.

In regulated sectors, M&A activity often requires additional oversight. For example:

• transactions involving banks or other financial institutions fall under the supervisory authority of the CBN, which must approve any:
• • acquisition of a significant equity interest; or
  • change in control;
• acquisitions involving insurance companies must be cleared by NAICOM; and
• the NCC oversees transactions affecting telecoms licensees.

1.4 Does the government have the power to intervene in technology M&A transactions in your jurisdiction? If so, what is its general approach in doing so?

Yes, the Nigerian government, through its regulatory agencies, does have the power to intervene in technology M&A transactions.

The primary avenue for government intervention is through the FCCPC. The FCCPC has the statutory power to review and approve any merger or acquisition that:

• meets the prescribed financial thresholds; or
• has the potential to affect competition within the Nigerian market.

In technology-related deals – especially those involving platforms with significant market share, data-driven services or cross-border digital operations – the FCCPC may take a more cautious approach. The FCCPC assesses whether a transaction is likely to lead to a substantial lessening of competition or create dominance in a particular market segment, such as:

• e-commerce;
• digital payments;
• ride-hailing; or
• logistics platforms.

Where there is concern about consumer harm, data monopolies or unfair market structures, the FCCPC may:

• impose conditions; or
• in rare cases, prohibit the transaction.

In addition to competition oversight, the government may intervene in technology M&A through the NDPC, which enforces the Nigeria Data Protection Act, 2023. Where a tech transaction involves the transfer of control over significant volumes of personal data or sensitive processing operations, the NDPC may require that the parties:

• conduct a DPIA; and
• demonstrate adequate safeguards.

The NDPC may also:

• insist on continuity in data-handling standards; and
• require notification of any change in data controller status.

Although the NOTAP does not conduct a formal review of mergers, it must approve and register agreements involving the transfer or licensing of foreign-owned technology before payments under such contracts can be remitted out of the country.

Similarly, the NCC may intervene where a deal affects licence holders in:

• broadband infrastructure;
• mobile communications; or
• related services.

The general approach of the Nigerian government is therefore not to restrict technology M&A outright, but rather to regulate such transactions through a risk-based, compliance-driven lens. The focus tends to be on:

• competition fairness;
• data privacy;
• regulatory compliance; and
• market stability.

In recent years, the government has also shown increased interest in ensuring that Nigerian consumers, employees and businesses are not adversely affected by foreign takeovers or consolidations of influential digital service providers.

2. Deal structure

2.1 How are technology M&A transactions typically structured in your jurisdiction?

The structure of a technology M&A transaction in Nigeria is largely influenced by:

• the target's stage – whether it is:
• • an early-stage startup;
  • a scaleup; or
  • a growth stage company
• its regulatory obligations; and
• whether the deal is domestic or cross-border.

Transactions are typically structured as either share or asset acquisitions, depending on:

• the parties' commercial objectives;
• tax considerations; and
• applicable regulatory requirements.

The most common structures include the following:

• Share acquisition: This is the most prevalent structure, particularly where the buyer seeks to acquire controlling or significant equity in a tech company. This method allows the acquirer to assume ownership of the company 'as is', including its:
• • assets;
  • contracts;
  • IP rights;
  • employees; and
  • liabilities.
• Share acquisitions are attractive for early-stage and growth-stage tech businesses because they preserve continuity, including existing regulatory licences and customer contracts. The transaction involves the transfer of ordinary shares or preference shares.
• Asset acquisition: Some transactions are structured as asset acquisitions, particularly where the buyer intends to acquire specific key assets (eg, proprietary software, customer data, intellectual property or equipment) while avoiding liabilities. This structure is also used where:
• • the target is not a going concern; or
  • regulatory issues (eg, compliance gaps or licensing problems) make share acquisition less attractive.
• In the tech space, asset deals often involve the transfer of:
• • source code;
  • IP rights;
  • user databases (subject to data protection compliance); and
  • software licences.
• Hybrid structures: Technology M&A transactions in Nigeria are increasingly adopting hybrid structures that combine elements of share and asset acquisitions to achieve greater commercial flexibility and risk management. These structures are commonly used in:
• • strategic transactions involving scaling platforms;
  • cross-border consolidations; or
  • acqui-hires.
• In such cases, the buyer may acquire key assets such as intellectual property, user databases or technology infrastructure while simultaneously purchasing equity to gain control or influence over the business. Hybrid deals often feature additional elements, such as:
• • earnout arrangements, where part of the purchase price is contingent on the target meeting future performance metrics;
  • deferred consideration, allowing staggered payments over time; or
  • stock-for-stock exchanges, especially in mergers between growth-stage companies or where the buyer is offering equity in lieu of cash.
• These structures are typically tailored to address:
• • valuation gaps;
  • regulatory constraints; and
  • the need to retain key technical talent post-acquisition.
• Schemes of arrangement: A scheme of arrangement is a court-supervised corporate restructuring process between a company and its shareholders or creditors, typically used for complex or large-scale M&A transactions, especially involving public companies. Under the Companies and Allied Matters Act (CAMA) and the Investments and Securities Act (ISA), such schemes must be:
• • approved by the Securities and Exchange Commission; and
  • sanctioned by the Federal High Court of Nigeria.
• The process is initiated by an application to the court for an order to convene separate meetings of shareholders (and, where applicable, creditors). At each meeting, the scheme must be approved by a majority in number representing at least 75% in value of those present and voting. Once sanctioned by the court, the scheme becomes binding on all affected stakeholders, regardless of whether they voted in favour. This structure is particularly suited to mergers or consolidations that require a clean transfer of all assets, liabilities and contracts without the need for piecemeal novation or consents. It is often used in regulated or high-value transactions where statutory certainty is paramount.

2.2 What are the potential advantages and disadvantages of the available structures?

The choice of structure in a technology M&A transaction in Nigeria brings with it a range of commercial, legal, tax and regulatory considerations. Each structure offers distinct advantages and potential drawbacks, depending on:

• the objectives of the parties;
• the nature of the business; and
• the regulatory landscape.

Share purchases are the most common structure, particularly where the buyer seeks to acquire control of a going concern. One of the key advantages of this structure is continuity: existing licences, contracts, intellectual property and employees generally remain intact, which simplifies integration and avoids the need for widespread novation or re-registration. This structure also tends to be more attractive for founders seeking a clean equity exit while preserving the operating structure of the company. However, the principal downside is that the buyer inherits the company 'as is', including:

• contingent liabilities;
• litigation risks; or
• compliance gaps.

As a result, thorough due diligence is essential. Moreover, share acquisitions often require various regulatory approvals, especially from:

• the Federal Competition and Consumer Protection Commission (FCCPC);
• the Securities and Exchange Commission; and
• sector-specific regulators if the company operates in a licensed space such as fintech or telecoms.

In contrast, asset purchases offer a higher degree of flexibility and risk control. Buyers can acquire selected assets such as source code, data, software licences or customer contracts while avoiding problematic liabilities or legacy issues. This makes asset deals particularly useful where:

• the target has tax arrears or unresolved compliance issues; or
• the buyer only wants a specific product line or IP portfolio.

However, these deals can be operationally complex:

• Each asset may need to be individually assigned or transferred; and
• Regulatory consents or new licences may be required, especially in heavily regulated sectors.

Where the transaction results in the buyer acquiring control over a significant part of the target's business, FCCPC approval may also be required. Asset deals may also trigger tax liabilities such as value-added tax or capital gains tax; and important relationships (eg, with customers or suppliers) could be disrupted if consent to transfer is not granted.

Some transactions, particularly in the growth or consolidation stages, are structured as hybrid deals, combining elements of both share and asset purchases. These are often tailored to strike a balance between risk and control and may include features such as:

• deferred consideration;
• performance-based earnouts; or
• stock-for-stock exchanges.

Hybrid structures are common in strategic mergers or acqui-hires, where the acquirer is interested not only in the target's assets, but also in its team or platform continuity. While these structures offer flexibility and the ability to align incentives, they tend to be more complex to document and execute. The negotiation of earnout formulas or valuation triggers may also introduce uncertainty and the potential for post-closing disputes.

For high-value or public-company transactions, a scheme of arrangement may be preferred. This is a statutory, court-supervised process under CAMA and the ISA. It allows a company to restructure its capital or business through a plan that is binding on all shareholders once:

• approved by at least 75% in value of those present and voting; and
• sanctioned by the Federal High Court.

Schemes of arrangement provide legal certainty and are particularly effective in situations requiring a clean legal transfer of all rights and obligations. However, they are time intensive, formal and subject to detailed regulatory scrutiny, including from the SEC. They are less common in the fast-paced startup ecosystem due to the procedural cost and rigidity involved.

2.3 What formal and substantive requirements must be met to transfer legal title to assets and shares in a technology M&A transaction?

Share transfers in Nigerian companies require board and shareholder approval, followed by the execution of a share transfer instrument (share transfer form and share purchase agreement). The seller's share certificate will be cancelled and a new certificate will be issued to the buyer, and the buyer's name must be entered in the company's register of members. Where the target operates in a regulated sector, prior approval must be obtained from the relevant regulator. The company must also file the transfer with the Corporate Affairs Commission to update its statutory records.

In asset acquisitions, the formal requirements depend on the type of asset being transferred. For tangible assets such as equipment or inventory, title typically passes through a bill of sale or asset transfer agreement, with clear identification of the assets and delivery or physical handover. Where real estate is involved, deed of assignment, governor's consent and registration at the relevant land registry are mandatory. For intangible assets such as software, intellectual property or domain names, the transfer must comply with the relevant laws, where the trademarks must be:

• assigned in writing through a trademark deed of assignment; and
• registered at the Trademarks Registry.

Copyrights may be transferred via IP assignment. Patents and industrial designs require:

• assignment through a patent assignment agreement; and
• registration with the Patents and Designs Registry.

Care must be taken to ensure that:

• the seller owns the intellectual property; and
• third-party open-source code does not infringe rights.

For contracts, customer data or licences, valid transfer may require third-party consents or novation, depending on the terms of the original agreements. For example, a software-as-a-service contract or vendor agreement may include anti-assignment clauses requiring customer approval before transfer.

2.4 What specific considerations should be borne in mind in relation to cross-border technology M&A transactions?

Cross-border technology M&A transactions involving Nigerian companies require careful attention to regulatory, tax and compliance considerations. Where the target operates in a regulated sector (eg, fintech, telecoms or healthtech), prior approval from the relevant regulator (eg, the Central Bank of Nigeria, the Nigerian Communications Commission or the National Health Insurance Authority) is often required before a change in ownership can be effected. In addition, transactions that meet the thresholds under the FCCPC Merger Control regime must be notified to, and cleared by, the FCCPC before closing.

Foreign investors must also comply with foreign exchange regulations. Acquisition funds must be imported through authorised dealers and a certificate of capital importation should be obtained to enable future dividend repatriation and exit rights. Registration with the Nigerian Investment Promotion Commission may be required to record foreign ownership of equity in a Nigerian company. Where the transaction involves foreign technology licensing or service arrangements, National Office for Technology Acquisition and Promotion registration may also be necessary for the repatriation of funds.

Transactions may also trigger tax liabilities – including in relation to the following, depending on the structure:

• withholding tax;
• stamp duties; and
• capital gains tax (CGT).

Where personal data is involved, the Nigeria Data Protection Act may apply, particularly in relation to cross-border data transfers and data subject rights.

Finally, deal documentation should clearly address IP ownership, dispute resolution (often via arbitration) and post-closing governance, especially where founders or technical teams remain involved. Cross-border deals also require enhanced due diligence on:

• know your customer;
• anti-money laundering; and
• regulatory compliance.

3. Due diligence

3.1 What due diligence should the acquirer conduct into the following aspects of a technology target?

Corporate and regulatory status: The acquirer should review the target's corporate records to confirm:

• incorporation details;
• shareholding structure;
• board composition; and
• compliance with the Companies and Allied Matters Act (CAMA).

It should also verify whether:

• the target holds all required business and sector-specific licences (eg, fintech, telecoms, healthtech); and
• any change of control triggers regulatory consent from bodies such as:
• • the Central Bank of Nigeria (CBN);
  • the Nigerian Communications Commission (NCC); or
  • the Federal Competition and Consumer Protection Commission (FCCPC).

IP rights: The target's ownership of IP is central in tech M&A. Confirm registration and title to key intellectual property, such as:

• trademarks;
• patents;
• source code; and
• domain names.

Ensure proper assignment of intellectual property developed by employees or contractors and assess any third-party intellectual property (eg, open-source software) used in the product stack to identify infringement or licensing risks.

Data privacy and protection: Evaluate the target's compliance with the Nigeria Data Protection Act, including:

• policies;
• privacy notices;
• consents;
• data processing agreements; and
• response frameworks for breaches or subject access requests.

Pay special attention to cross-border data transfers, especially if the acquirer is foreign.

Commercial contracts: Review key contracts with:

• customers;
• vendors;
• cloud service providers; and
• strategic partners.

Look for:

• anti-assignment or change-of-control clauses;
• renewal terms; and
• termination triggers.

Confirm contract validity and revenue recognition.

Financial and tax matters: Examine audited financials and check for:

• tax compliance;
• outstanding liabilities; and
• whether any tax exemptions (eg, Pioneer Status) apply.

Due diligence should also assess:

• Corporate Affairs Commission filings;
• the deduction and remittance of statutory payments, including:
• • value-added tax;
  • withholding tax; and
  • employee-related deductions such as Pay as You Earn;
• pensions; and
• social security contributions.

Employment and founder commitments: Review:

• employment contracts;
• non-compete clauses; and
• confidentiality agreements.

For founders and key personnel:

• assess post-deal retention plans; and
• identify whether their intellectual property or knowledge is essential to the business's continued success.

Environmental, social and governance standards: Assess whether the target has policies in place on data ethics, workplace diversity, cybersecurity governance and environmental sustainability – particularly where expansion or resale to international markets is planned.

Litigation and regulatory risk review: This includes searches for ongoing, threatened or historical disputes involving:

• intellectual property;
• employment issues;
• breach of contract;
• regulatory non-compliance; or
• shareholder claims.

3.2 How is technology used to facilitate due diligence in a technology M&A transaction?

Technology plays a vital role in facilitating due diligence during technology M&A transactions, enhancing speed, accuracy and collaboration between parties. One of the most widely used tools is the virtual data room (VDR), which provides a secure, centralised platform for sharing confidential documents. VDRs offer version control, access tracking and structured indexing, allowing legal, tax, technical and financial advisers to conduct simultaneous reviews efficiently.

AI-driven tools are increasingly used to analyse large volumes of contracts and documents. These systems extract key terms such as change-of-control provisions, IP ownership, exclusivity clauses and termination rights:

• highlighting potential risks; and
• saving time compared to manual review.

Where the transaction involves proprietary software or platforms, automated code scanning tools may be used to:

• assess software quality;
• identify security vulnerabilities; and
• detect reliance on open-source libraries that may raise licensing or IP risks.

Cybersecurity tools also play a role in diligence, helping to assess the target's:

• vulnerability to data breaches; and
• compliance with frameworks such as the Nigeria Data Protection Act (NDPA).

These tools simulate threats and test the integrity of data protection measures.

Collectively, these tools:

• support more thorough, data-driven diligence;
• reduce transaction timelines; and
• help acquirers to make better-informed decisions.

3.3 What concerns, considerations and best practices should the acquirer bear in mind when conducting due diligence in a technology M&A transaction?

When conducting due diligence in a technology M&A transaction, the acquirer must prioritise issues unique to tech businesses, particularly around:

• intellectual property;
• regulatory compliance;
• scalability; and
• key personnel.

One key concern is ownership and protection of intellectual property. The acquirer should confirm that all intellectual property – especially software, source code, patents and trademarks – is validly registered or assigned to the company, with no competing claims. If open-source software is used, its licensing terms must be reviewed to avoid downstream infringement or disclosure obligations.

Data privacy and cybersecurity are equally critical. The buyer must:

• assess compliance with the NDPA;
• review how data is collected, stored and shared; and
• confirm the existence of internal data governance policies.

Inadequate compliance or prior breaches can create material legal and reputational risks, especially in data-driven sectors such as fintech or healthtech.

Where the target operates a licence-dependent business (eg, fintech, digital financing, telecoms or healthtech), it is crucial to confirm that all required regulatory licences are:

• valid;
• up to date; and
• transferable.

Many licences are not automatically transferable and may require prior consent from regulators (eg, the CBN, the NCC or the National Insurance Commission). Non-compliance or pending enforcement actions could delay or derail the deal.

Key personnel risk is another priority, particularly where founders or technical staff hold critical institutional knowledge or IP rights. Retention strategies, such as earnouts or post-closing service agreements, may be required.

Best practices include:

• prioritising regulatory and commercial red flags early; and
• engaging cross-functional advisers (legal, tax, tech, compliance) to ensure a well-rounded risk assessment.

4. Stakebuilding

4.1. Can the acquirer build up a stake in a technology target before and/or during the deal process with a view to increasing its prospects of success? If so, what disclosure obligations apply in this regard?

Yes, an acquirer may build up a stake in a technology target before or during the deal process, subject to legal, regulatory and disclosure requirements. However, the permissibility and implications of such pre-deal acquisitions depend on the target's:

• corporate status (private or public);
• sector of operation; and
• governing agreements.

In private companies, stake building is generally possible if not restricted by:

• the company's articles of association; or
• a shareholders' agreement.

Pre-emption rights, consent requirements or restrictions on transfer may limit the ability to acquire shares without board or shareholder approval. Any acquisition that results in a change of control may also trigger regulatory approval requirements, particularly in licensed sectors such as fintech, telecoms and insurance.

For public companies, the Investment and Securities Act, 2025 and the Securities and Exchange Commission (SEC) Rules impose disclosure obligations where an acquirer acquires 5% or more of the voting shares. In such cases, the acquirer must disclose its interest to the SEC and the target. If the acquirer crosses a control threshold (30% or more), it may be required to make a mandatory takeover offer to other shareholders.

In addition, if the transaction qualifies as a merger under the Federal Competition and Consumer Protection Act, prior notification to the Federal Competition and Consumer Protection Commission (FCCPC) is required before the deal is implemented. Failure to comply may attract penalties or render the transaction void.

Therefore, while pre-deal stake building is legally permissible, it must be carefully managed to avoid regulatory breaches such as:

• failure to notify the FCCPC of a qualifying merger;
• non-compliance with SEC disclosure thresholds; or
• breach of pre-emption rights under shareholders' agreements.

4.2 What other legal and regulatory considerations should be borne in mind in relation to stake-building in a technology target?

When building a stake in a technology target in Nigeria, acquirers must consider a range of legal, regulatory and tax issues that may affect the structure, timing and permissibility of the transaction.

If the target operates in a regulated sector (eg, fintech, telecommunications, insurance or healthtech), any acquisition of equity may require prior approval from the relevant regulator. For example, the Central Bank of Nigeria mandates approval for the acquisition of 5% or more of a licensed entity's shares. Similar requirements apply under the rules of the National Insurance Commission and other sector-specific regulators. Without the required approvals, the transaction may be void or attract sanctions.

In private companies, acquirers must also comply with any transfer restrictions, pre-emption rights or shareholder consent requirements set out in:

• the company's articles of association; or
• a shareholders' agreement.

For public companies:

• acquiring 5% or more of the voting shares requires disclosure to the SEC and the Nigerian Exchange; and
• reaching the 30% threshold triggers a mandatory takeover offer.

Market conduct and insider trading rules must also be observed.

Where the acquirer is foreign, stake building must comply with foreign exchange regulations, including:

• importing capital through an authorised dealer; and
• obtaining a certificate of capital importation to ensure repatriation rights.

Tax considerations include:

• potential stamp duties on share transfers; and
• capital gains tax on disposals by Nigerian sellers.

The buyer should confirm whether:

• the target has any outstanding tax liabilities; or
• the transaction creates any tax exposure.

5. Representations and warranties

5.1. What representations and warranties are typically made in technology M&A transactions in your jurisdiction?

In Nigerian technology M&A transactions, representations and warranties typically fall into the following categories:

• Fundamental warranties:
• • The target has the authority and capacity to enter into the transaction;
  • The target holds valid, marketable title to the shares/assets, free of undisclosed encumbrances;
  • The transaction does not conflict with the target's constitutional documents or applicable laws; and
  • All required regulatory, shareholder and third-party consents have been obtained.
• General warranties:
• • The target is duly incorporated and compliant with governance obligations;
  • The business of the target complies with applicable laws;
  • All necessary licences and permits belonging to the target are valid and in force;
  • Key contracts of the target are valid, binding and not in default;
  • The financial statements of the target are accurate and compliant with accounting standards; and
  • There are no undisclosed disputes or investigations.
• Tax warranties:
• • All tax returns have been timely and accurately filed and all taxes have been paid when due;
  • There are no pending or threatened tax audits, investigations or disputes with tax authorities;
  • The transaction will not result in the loss of any tax exemptions, benefits or incentives; and
  • All tax clearances and required notifications (eg, capital gains tax or stamp duties) have been obtained or disclosed.
• Technology-specific warranties:
• • The target owns or is properly licensed to use all key intellectual property, software, data and technology assets used in its operations;
  • There are no known or threatened claims of infringement, invalidity or unauthorised use of third-party intellectual property;
  • The target has implemented appropriate cybersecurity measures (eg, access controls, firewalls and internal protocols) to protect core technologies and data;
  • The target has not suffered any data breach, cyberattack or unauthorised access incident; and
  • The products or services offered by the target:
  • • are compliant with relevant safety, consumer protection and technology regulations; and
    • do not attract any pending or historical product liability claims.

5.2 Does the survival period of representations and warranties vary depending on the type of representation or warranty?

The survival period of representations and warranties typically varies depending on the nature and type of the representation or warranty involved.

Fundamental representations and warranties – which include assurances about the seller's capacity and authority, title to shares or assets and tax matters – generally have the longest survival periods due to the statutory limitation periods or materiality that apply. For example, tax warranties often survive for up to six years or more, in line with the limitation period under the Federal Inland Revenue Service (Establishment) Act, which specifies a six-year period for raising new or additional tax assessments. The Nigerian Tax Administration Act, 2025, which comes into force on 1 January 2026, repeats this provision. In negotiated transactions, the survival period for fundamental warranties may be extended up to any period that is contractually agreed between parties depending on the nature of the asset and deal structure. However, parties typically negotiate durations that do not exceed six years, given that the default limitation period in the absence of a contractual agreement under the statutes of limitation law in most states is six years.

General or non-fundamental warranties – covering operational aspects such as compliance with laws, contracts, employees, intellectual property and regulatory matters – usually have shorter survival periods, commonly between 12 to 24 months post-closing. This negotiated timeframe reflects common practice in Nigerian M&A transactions, balancing the buyer's need for protection with the seller's interest in limiting long-term liability. It often aligns with the duration of any related escrow arrangements or indemnity holdbacks designed to secure potential claims.

5.3. What are the typical consequences of breach of the representations and warranties in a technology M&A transaction?

In Nigerian technology M&A transactions, a breach of representations and warranties typically entitles the acquirer to seek contractual remedies, most commonly through indemnification or damages. If a representation is found to be untrue or misleading and causes the acquirer to suffer a loss – whether financial, regulatory or reputational – the seller may be required to compensate the acquirer.

The consequences of a breach are generally governed by the indemnity provisions in the transaction agreement. These provisions often define the extent of the seller's liability by setting:

• caps (limiting maximum exposure);
• baskets or thresholds (minimum claim amounts); and
• survival periods (how long post-closing claims can be made).

Claims related to fraud or wilful misconduct are typically excluded from these limits and may result in uncapped liability.

In technology transactions, breaches relating to IP ownership, data privacy compliance or regulatory licences can be especially material. These may lead not only to financial loss but also to regulatory investigations, licence revocation or third-party litigation – particularly where the target operates in sensitive sectors such as fintech, healthtech or digital infrastructure.

In transactions that include escrow or holdback arrangements, the buyer may have the right to claim against funds set aside at closing to cover breaches of representations, warranties or indemnities. Where the deal provides for earnout payments, a breach by the seller may:

• entitle the buyer to withhold future earnout instalments; or
• in some cases, trigger clawback provisions requiring repayment.

Ultimately, the specific consequences will depend on:

• the nature of the breach;
• the negotiated remedies in the agreement; and
• whether the breach was discovered pre or post-closing.

5.4 What are the prevailing trends with regard to the use of representation and warranty indemnity insurance in technology M&A transactions in your jurisdiction?

Warranty and indemnity (W&I) insurance is still not widely adopted in Nigerian technology M&A transactions, with parties typically relying on traditional risk allocation methods such as:

• negotiated indemnity clauses;
• escrow holdbacks; and
• purchase price adjustments to allocate post-closing risk.

However, its use is gradually increasing, particularly in high-value or cross-border deals involving international investors which seek cleaner exits and reduced post-closing liabilities. While cost and limited local market familiarity remain constraints, W&I insurance is gaining traction as a strategic tool in complex transactions and its relevance is expected to grow as underwriting capacity and regulatory clarity improve.

6. Deal Process

6.1. What documents are typically executed in the initial preparatory stage of an M&A transaction?

In Nigerian technology M&A transactions, the initial preparatory stage involves executing key documents that:

• guide the deal process;
• protect sensitive information; and
• outline preliminary terms.

They include the following:

• Non-disclosure agreement (NDA): The NDA is typically the first document signed, which ensures confidentiality over information shared during due diligence. NDAs are usually mutual, especially where both sides disclose proprietary data such as source code, financials or business plans.
• Letter of intent, memorandum of understanding or term sheet: These documents typically follow, setting out key commercial terms such as:
• • price;
  • structure (share or asset sale); and
  • timelines.
• Although largely non-binding, they often include binding provisions on:
• • confidentiality;
  • exclusivity; and
  • dispute resolution.
• Cost-sharing agreement: In certain deals, especially complex or multi-party transactions, parties may enter into a cost-sharing arrangement to allocate expenses incurred during the due diligence and negotiation phases.
• Due diligence request lists and reports: The buyer typically initiates a comprehensive due diligence process covering legal, financial, tax, operational and regulatory aspects of the target. The resulting reports inform:
• • deal valuation;
  • risk allocation; and
  • negotiation strategy.

6.2. Are pre-signing market checks required in your jurisdiction?

Pre-signing market checks are not explicitly mandated as a formal requirement under Nigerian law for M&A transactions. However, conducting market checks and due diligence is a common and prudent commercial practice, especially in the technology sector, to assess market conditions, competitive landscape and potential regulatory concerns before signing definitive agreements.

6.3 Are pre-signing exclusivity agreements typically entered into in your jurisdiction?

Yes, pre-signing exclusivity agreements are common in Nigerian M&A transactions, particularly in the technology sector, where buyers may require deal certainty before committing to due diligence and negotiations.

Exclusivity is usually included as a binding clause within a term sheet or a letter of intent rather than as a standalone agreement. It restricts the seller from negotiating with or soliciting offers from other prospective buyers for a defined period – typically between 30 and 90 days – to give the buyer time to conduct due diligence and finalise transaction documents.

While not required by law, exclusivity provisions are considered market practice, especially in:

• competitive sale processes;
• founder exits; or
• deals involving regulatory complexities.

They are particularly important:

• for buyers investing significant time and resources upfront; or
• in cross-border transactions where coordination is more involved.

Sellers may push for shorter exclusivity periods or carveouts for certain negotiations, particularly if they expect multiple offers. Buyers, in turn, may request automatic extensions if regulatory approvals or diligence reviews are delayed.

6.4 Are break fees permitted in your jurisdiction? If so, under what conditions will they generally be payable? What restrictions or other considerations should be addressed in formulating break fees?

Yes, break fees are permitted in Nigeria, since there is no specific prohibition against them in M&A transactions. They are becoming more common, particularly in:

• competitive bids;
• cross-border transactions; or
• deals involving significant upfront costs for the buyer.

A break fee is a contractually agreed sum payable if the transaction fails due to specific reasons, usually attributable to the seller. Typical triggers for break fees include:

• the seller's acceptance of a competing offer during an exclusivity period;
• the seller's withdrawal from the transaction without cause;
• failure to obtain shareholder or board approvals due to the seller's actions; and
• breach of key obligations or failure to cooperate in obtaining regulatory approvals.

For enforceability, the break fee must be a genuine pre-estimate of loss, not a penalty. Nigerian courts generally uphold such clauses where the fee is reasonable and proportionate. In practice, break fees are often capped at 1% to 3% of the deal value to avoid being viewed as coercive or anti-competitive.

Buyers may also agree to a reverse break fee, particularly where the buyer must secure financing, internal approvals or regulatory clearance, offering symmetry in risk allocation.

6.5. What valuation methods are typically used in technology M&A transactions in your jurisdiction?

The most common valuation methods in Nigerian technology M&A transactions include the following:

• Discounted cash-flow analysis: This method estimates the present value of the target's future cash flows, discounted using a risk-adjusted rate. It is useful for mature tech businesses with predictable revenue and cash flow
• Comparable company analysis (market multiples): This approach compares the target to similar companies using valuation multiples such as:
• • enterprise value/earnings before interest, taxes, depreciation and amortisation; or
  • price/earnings.
• It provides a market-based benchmark and is widely used for pricing negotiations.
• Asset-based valuation: This method values the business based on the net value of its assets (assets minus liabilities). It is less common for tech startups but may apply where tangible assets or intellectual property can be distinctly valued.
• Venture capital method: Common for early-stage startups, this approach estimates the expected future exit value and discounts it back to present value using high risk-adjusted returns.
• Real options valuation: This considers the strategic flexibility of a tech company, such as the option to expand, pivot or delay investment. It is complex but relevant where future decisions significantly affect value.

6.6. What confidentiality obligations apply throughout the various stages of a technology M&A transaction?

• Preliminary stage: Once the transaction advances, parties typically enter into an NDA before any exchange of sensitive materials to legally oblige the recipient to use disclosed information.
• Negotiation stage: During negotiations, confidentiality extends to the contents of draft documents such as:
• • the letter of intent;
  • the term sheet;
  • the share purchase agreement or asset purchase agreement; and
  • any supporting analyses or valuation data.
• External advisers involved in the deal are also subject to strict professional and contractual confidentiality obligations.
• Due diligence stage: During due diligence, the confidentiality obligation becomes particularly critical, as the target discloses highly sensitive information, including:
• • intellectual property;
  • source code;
  • customer data;
  • financials;
  • cybersecurity protocols; and
  • trade secrets.
• Access is typically granted on a need-to-know basis, with disclosure limited to internal teams and external advisers.
• Regulatory stage: When filings are made to regulatory authorities such as the Federal Competition and Consumer Protection Commission or the SEC, parties are generally required to submit a non-confidential summary for public records, while sensitive details are filed confidentially. Regulators may disclose redacted versions to ensure public transparency while protecting proprietary and commercially sensitive information.
• Post-closing stage: Even after the deal closes, confidentiality obligations may persist, particularly with respect to:
• • proprietary technology;
  • employee data; or
  • transitional services.
• Regulatory agencies conducting post-merger assessments must also uphold statutory obligations to protect any confidential business information received during the process.

7. Final transaction documents

7.1 What types of ancillary agreements are typically executed in a technology M&A transaction in your jurisdiction?

In Nigerian technology M&A transactions, several ancillary agreements are often executed alongside the main transaction documents to:

• support implementation;
• manage post-closing obligations; and
• safeguard the interests of the parties involved.
  

These agreements typically address operational continuity, IP protection, and governance matters, such as the following:

• Shareholders' agreements: Where the buyer does not acquire 100% of the company. These regulate governance, transfer restrictions, board composition and exit rights, especially where founders or investors remain post-closing.
• Employment or retention agreements: Particularly where the ongoing participation of key individuals is essential to business continuity. These often include non-compete, non-solicit and IP assignment provisions.
• IP assignment agreements: These agreements are critical to ensure that the buyer obtains legal ownership of the target's technology, source code, trademarks or patents – especially when such intellectual property was developed by founders, employees or contractors.
• Transition services agreements: May be used in asset sales or partial acquisitions, enabling the seller to provide limited operational support (eg, IT infrastructure or customer service) during the transition period.
• Escrow agreements: These are used to hold part of the purchase price in escrow to cover potential claims or breaches.
• Earnout agreements: Outline performance-based payments where part of the consideration depends on the future achievement of:
• • revenue;
  • user growth; or
  • profitability milestones.
• Non-compete and non-solicit agreements: To protect against competitive threats from the seller post-transaction.

7.2 What pre and post-closing conditions are typically included in the transaction documents?

Pre-closing conditions typically include:

• regulatory approvals, such as:
• • merger clearance from the Federal Competition and Consumer Protection Commission (FCCPC); and
  • consents from relevant sector regulators (eg, Central Bank of Nigeria, the Nigerian Communications Commission or the National Insurance Commission) depending on the nature of the target's business;
• corporate authorisations, including board and shareholder resolutions in line with the Companies and Allied Matters Act;
• a no material adverse change (MAC) clause, confirming that no significant deterioration has occurred in the target's business, assets or financial condition between signing and closing;
• satisfactory completion of due diligence, particularly on:
• • IP ownership;
  • regulatory status;
  • tax liabilities; and
  • data protection compliance; and
• execution of ancillary agreements, such as:
• • IP assignment deeds;
  • employment or retention agreements; and
  • escrow arrangements.

Post-closing conditions commonly include:

• regulatory filings, including post-merger notifications to the FCCPC and share transfer filings with the Corporate Affairs Commission;
• earnout mechanisms, where part of the purchase price is contingent on future performance metrics such as revenue or user growth;
• IP and contract transfers, where third-party consents, novations or National Office for Technology Acquisition and Promotion (NOTAP) registration is required after closing;
• transitional services, where the seller supports business continuity post-closing for a defined period; and
• integration of employees into the buyer's structure and compliance with labour regulations. This may involve:
• • onboarding staff under new terms;
  • aligning compensation and benefit schemes; and
  • implementing stock option plans for key personnel.
• Where a change of employer occurs, statutory notifications may be required, including filings with the National Pension Commission (PENCOM) and relevant tax authorities.

7.3 Are technology-related indemnities included in the transaction documents? If so, what do these typically address?

Yes, technology-related indemnities are a standard feature in Nigerian M&A transactions involving tech companies. They are used to allocate risk and protect the buyer from losses arising from breaches related to the target's:

• core technology assets;
• compliance status; or
• operational representations.

These indemnities typically address the following:

• IP ownership and infringement: Protection against third-party claims that:
• • the target's software, trademarks or other intellectual property infringes existing rights; or
  • the target lacks valid title to key assets.
• NOTAP compliance: Indemnities may also cover failures to properly register technology transfer agreements with the NOTAP, especially where ongoing use of foreign-owned intellectual property or software is critical to the business.
• Open-source software compliance: Indemnities covering improper or non-compliant use of open-source software, particularly where restrictive licences (eg, the GNU General Public License or the GNU Affero General Public License) may trigger unintended disclosure obligations or IP contamination.
• Data protection and cybersecurity: Coverage for:
• • breaches of the Nigeria Data Protection Act;
  • unlawful processing of personal data; or
  • prior security incidents affecting customer or user data.
• Licensing and regulatory compliance: Where the target operates in a regulated space (eg, fintech or healthtech), indemnities may also cover lapses in regulatory licences or historical non-compliance.

7.4 What limitations to liabilities under the transaction documents (including for representations, warranties and specific indemnities) typically apply?

In Nigerian technology M&A transactions, seller liability under representations, warranties and indemnities is usually subject to well-defined limitations aimed at balancing risk between the parties. These typically include the following:

• Time limitations: General warranties often survive for 12 to 24 months after closing, while fundamental warranties (eg, title, tax, corporate authority) may survive up to six years. Specific indemnities especially for regulatory or data issues can have extended survival periods depending on the risk.
• Financial caps: Liability under general warranties is commonly capped at 10–30% of the purchase price. For fundamental warranties, caps may go up to 100%. Separate caps may apply to specific indemnities.
• De minimis and basket provisions: A de minimis threshold excludes small individual claims – for example, below NGN 75 million; while baskets set a cumulative minimum before claims are recoverable. Baskets can be:
• • 'tipping' (all claims payable once the threshold is met); or
  • 'deductible' (only amounts above the threshold are recoverable).
• Knowledge and disclosure qualifiers:
• • Warranties may be qualified by the seller's actual or constructive knowledge; and
  • Exceptions disclosed in a disclosure schedule may limit liability.
• Exclusions: Indirect, consequential or punitive damages are typically excluded, as are losses resulting from the buyer's actions post-closing.
• Proportional liability: Where multiple sellers are involved, liability may be limited to their ownership percentage in the target.

7.5 Are earnouts or contingent consideration provisions typically included in the transaction documents? If so, what additional issues do they involve?

Earnouts and other contingent consideration mechanisms are commonly used in Nigerian technology M&A transactions, especially where the target is an early-stage or high-growth company with uncertain future performance. These provisions allow part of the purchase price to be deferred and linked to specific post-closing financial or operational milestones, helping to bridge valuation gaps and align incentives between buyer and seller.

Typical earnout metrics include:

• revenue;
• earnings before interest, taxes, depreciation and amortisation;
• net income;
• user growth;
• product launch milestones; or
• regulatory approvals.

In technology deals, recurring revenue or platform engagement may also be relevant benchmarks.

However, earnouts introduce several complexities:

• Performance measurement: Clear definitions of applicable metrics, accounting principles and timing are critical to avoid disputes. Ambiguity can lead to costly disagreements.
• Control during earnout period: Sellers often seek operational input or veto rights to protect their ability to meet earnout targets, while buyers generally desire control over business decisions post-closing.
• Dispute resolution: Earn-outs are frequent sources of post-closing disputes. Agreements typically include mechanisms such as expert determination or arbitration to resolve conflicts efficiently.
• Tax implications: Depending on structure and documentation, earnout payments may be treated as part of the purchase price or taxable income, impacting the seller's tax liabilities.

8. Employment issues

8.1 What limitations are applicable to non-compete agreements in your jurisdiction?

In Nigeria, there are no statutory provisions prohibiting non-compete agreements. They are generally enforceable but case law establishes that they must meet certain limitations to be upheld. Courts assess these agreements based on reasonableness and public policy, balancing the protection of legitimate business interests with an individual's right to work and geographical scope. The key limitations include the following:

• Reasonableness: Restrictions must be reasonable in:
• • geographic scope;
  • duration; and
  • the types of activities prohibited.
• Overly broad or vague clauses are likely unenforceable.
• Duration: Non-compete clauses typically last between six months and two years. Longer restrictions require strong justification and are less likely to be upheld.
• Legitimate interest: The enforcing party must show a legitimate business interest, such as protection of:
• • trade secrets;
  • confidential information; or
  • customer goodwill.
• Geographical scope: The restriction must be limited to a specific area where the employer has a legitimate business interest. Nationwide or international restrictions may be unenforceable unless the employer can demonstrate a corresponding business footprint.
• Consideration: The person bound by the non-compete must receive valid consideration – such as employment, promotion or other benefits – to make the restriction enforceable.
• Public policy: Clauses that impose undue hardship or unreasonably restrain trade may be invalidated as contrary to public policy.

In M&A transactions, non-compete provisions are more likely to be upheld where:

• they relate to the sale of a business; and
• the seller has received valuable consideration.

8.2 How is employee equity treated in technology M&A transactions in your jurisdiction?

In Nigerian technology M&A transactions, employee equity – such as stock options or share awards – is a key factor for retaining talent. The treatment depends on:

• the deal structure; and
• the terms of the company's equity plans.

Common approaches include:

• assuming existing equity plans; or
• substituting them with equivalent awards in the acquiring company to preserve employee incentives.

Alternatively, outstanding options may be:

• bought out for cash; or
• converted into shares of the buyer, often based on agreed valuation formulas.

Acceleration clauses are frequently included, allowing unvested awards to vest upon a change of control, enabling employees to benefit sooner. These may be:

• single-trigger – vesting occurs automatically on acquisition; or
• double-trigger – vesting occurs only if:
• • there is a change in control; and
  • the employee is terminated without cause or resigns for good reason within a defined post-deal period.

The choice has significant implications for retention, especially where the acquirer seeks to retain key personnel.

Equity plans are governed by plan documents that outline:

• vesting schedules;
• transfer rights; and
• treatment on change of control.

Due diligence is vital to identify all outstanding awards and assess related liabilities.

Tax implications are also important. Gains from equity awards may trigger income or capital gains tax, depending on:

• the transaction structure; and
• the timing of vesting or exercise.

Clear agreement on employee equity treatment is essential to:

• maintain employee morale;
• meet legal requirements; and
• facilitate smooth integration post-acquisition.

8.3 What other key concerns and considerations should be borne in mind by the parties to technology M&A transactions in your jurisdiction from an employment perspective?

In Nigerian technology M&A transactions, employment-related concerns extend beyond equity and non-compete agreements, encompassing several key considerations that parties must carefully address to ensure a smooth transition and compliance with local laws.

First, compliance with the Labour Act and related regulations is essential. This includes:

• proper handling of employee contracts;
• adhering to statutory entitlements such as severance, pensions and benefits; and
• ensuring lawful termination or transfer of employment.

Particularly in asset sales, where contracts may not automatically transfer, novation or fresh contracts may be necessary to avoid legal disputes.

Second, cultural integration and communication are critical to retaining key talent, especially in technology firms where specialised skills drive value. Parties should plan for clear communication strategies and employee engagement during the transition.

Third, in many transactions – particularly acqui-hires or strategic acquisitions – it is also important to address the continued involvement of the target's founders and key employees post-acquisition. Their ongoing engagement may be tied to:

• deferred equity vesting;
• retention bonuses; or
• earnout arrangements.

These incentives are typically structured to:

• encourage continuity; and
• align performance with post-closing goals.

Fourth, regulatory notifications and filings are often required post-transaction, including informing the National Pension Commission and tax authorities about changes in employer status to maintain compliance.

Fifth, the treatment of existing collective bargaining agreements or employee unions should be considered, even though unionisation is less common in the tech sector.

Lastly, confidentiality and data protection obligations related to employee information must be maintained in line with the Nigeria Data Protection Act, particularly during due diligence.

9. Tax issues

9.1 What key concerns and considerations should be borne in mind by the parties to technology M&A transactions in your jurisdiction from a tax perspective?

Key tax concerns in Nigerian technology M&A transactions include the following:

• Transaction structure: Deciding between a share purchase or asset purchase affects tax liabilities. Share sales attract capital gains tax (CGT); while asset sales may trigger value-added tax (VAT), stamp duty and CGT on assets.
• Withholding tax: Proper withholding and remittance on payments, especially to non-resident shareholders or vendors, is required to avoid penalties.
• Tax clearance certificates: Often required by regulators, these certificates can impact deal timing.
• Tax due diligence: Identify potential unpaid and unfiled taxes – including companies income tax, penalties or disputes – that may affect the buyer post-acquisition.
• Employee-related taxes: Review Pay as You Earn and other employee taxes in workforce integration.
• Tax planning and incentives: Consider reliefs under Nigeria's Economic Development Incentives, Technology Development Funds, or other applicable incentives to improve tax efficiency.

Engaging tax advisers early helps to optimise the transaction structure and ensures compliance with Nigerian tax laws.

10. ESG Issues

10.1 What key concerns and considerations should be borne in mind by the parties to technology M&A transactions in your jurisdiction from an ESG perspective?

Environmental, social and governance (ESG) factors are increasingly critical in Nigerian technology M&A transactions, driven by investor expectations and regulatory focus. Key considerations include the following:

• Environmental impact: Assess energy consumption, e-waste disposal and data centre sustainability to identify potential environmental risks.
• Social Factors: Review:
• • workplace diversity and inclusion policies;
  • employee welfare;
  • health and safety standards; and
  • data ethics, including privacy and responsible AI use.
• Governance: Evaluate corporate governance structures, board composition, transparency, anti-corruption policies and compliance with laws to mitigate regulatory and reputational risks.
• Regulatory compliance: Ensure adherence to the Nigeria Data Protection Act and other relevant laws to avoid penalties and protect reputation.
• Reputation and stakeholder expectations: Consider past ESG issues or controversies that could affect brand value and investor confidence.
• ESG reporting: Expect targets to have robust ESG disclosure frameworks aligned with global standards to support informed decision making.

11. Trends and predictions

11.1 How would you describe the current technology M&A landscape and prevailing trends in your jurisdiction? What significant deals took place in the last 12 months?

The technology M&A landscape in Nigeria has experienced significant growth and transformation, fuelled by:

• the rapid expansion of the digital economy; and
• increasing investor confidence.

Deal volumes and values have surged, particularly in sectors such as:

• fintech;
• e-commerce; and
• digital services.

Cross-border investments remain prominent, reinforcing Nigeria's position as a leading tech hub in Africa. Acquirers are increasingly focusing on early and growth-stage companies with innovative solutions and sizeable user bases. Flexible deal structures such as earnouts, hybrid transactions and stock-for-stock exchanges have become more common, reflecting a maturing market and the need for risk-sharing mechanisms. Regulatory oversight has also intensified, with the Federal Competition and Consumer Protection Commission playing a more active role in merger control within the sector. Over the past 12 months, several notable deals have shaped the market:

• Moniepoint Inc's acquisition of Sumac Microfinance Bank: Moniepoint received regulatory approval from the Competition Authority of Kenya to acquire a 78% stake in Sumac Microfinance Bank Limited. This move:
• • strengthens Moniepoint's regional footprint; and
  • supports its strategy to offer financial services across East Africa.
• OmniRetail's acquisition of Traction: Leading B2B e-commerce platform OmniRetail acquired Traction, a Nigerian startup providing payment and software tools to small and medium-sized companies. The acquisition aims to:
• • deepen OmniRetail's reach into digital payment infrastructure; and
  • support its retail digitisation efforts.
• Tekedia Capital's acquisition of Quizac: Tekedia Capital acquired Quizac, an edtech platform that uses gamified learning to engage students. The deal integrates Quizac into Tekedia's innovation ecosystem, aiming to scale its reach and impact in digital education.
• SteamaCo's acquisition of Shyft Power Solutions: UK-based energy firm SteamaCo acquired Nigeria's Shyft Power Solutions to expand its footprint in energy revenue management across Africa. The acquisition aligns with the increasing trend of climate-tech and energy-focused M&A in Nigeria.
• LH Telecoms' acquisition of 9Mobile: UK telecoms company LH Telecoms Limited acquired a majority stake in Emerging Markets Telecommunication Services Limited, the operator of 9Mobile. This deal represents renewed international interest in Nigeria's telecoms sector and marks a major turnaround for the struggling mobile operator.
• BuuPass' acquisition of Quickbus: Kenyan mobility startup BuuPass acquired Quickbus, a digital bus ticketing platform operating across Nigeria, South Africa and other African markets. The acquisition expands BuuPass' presence into West and Southern Africa:
• • reinforcing its position as a pan-African leader in digital transportation infrastructure; and
  • enhancing its ability to streamline intercity bus travel across the continent.
• LemFi's acquisition of Pillar: Nigerian-founded fintech LemFi acquired Pillar, a UK-based credit card issuer, as part of its strategy to expand beyond remittances. The deal enables LemFi to offer debit cards, multi-currency wallets and credit to migrants without UK credit histories. With over $86 million raised to date and 2 million users, LemFi's acquisition reflects a broader trend among African fintechs to secure global licensing infrastructure for scale and trust.

11.2. Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

Several important developments are anticipated in the next 12 months that may impact technology M&A transactions in Nigeria:

• Implementation of the Investment and Securities Act (ISA), 2025: The recently enacted ISA is expected to be operationalised through detailed Securities and Exchange Commission (SEC) rulemaking. One key change will be the mandatory SEC approval for mergers, takeovers and schemes involving public companies, introducing more formal oversight and regulatory scrutiny for public M&A deals.
• Banking sector recapitalisation and consolidation: Following the Central Bank of Nigeria's directive on new minimum capital thresholds for banks, the industry is preparing for a fresh wave of consolidation activity. With a compliance deadline of March 2026, several banks are expected to initiate mergers, acquisitions and capital-raising transactions within the next 12 months.
• Operationalisation of the Economic Community of West African States (ECOWAS) Regional Merger Control: The ECOWAS Regional Competition Authority is expected to formally roll out a unified cross-border merger control regime. Once in effect, it will simplify merger approvals for transactions spanning multiple West African countries, including Nigeria.
• Establishment of a carbon credit and green finance framework: The federal government of Nigeria is actively working on a carbon market policy and additional green finance regulations under its Energy Transition Plan. These reforms aim to attract ESG-driven capital and are expected to influence deal activity, especially in:
• • clean tech;
  • infrastructure; and
  • sustainability-linked investments.
• Enactment of the Nigeria Tax Act, 2025: The recently enacted Nigeria Tax Act, together with related tax administration reforms, is expected to be operationalised through comprehensive rulemaking and new compliance protocols. These reforms:
• • are anticipated to:
  • • modernise Nigeria's tax landscape; and
    • streamline compliance; and
  • have significant implications for the structuring and execution of M&A deals, particularly in relation to:
  • • due diligence;
    • transaction costs; and
    • post-acquisition integration.

12. Tips and traps

12.1 What are your top tips for smooth closing of technology M&A transactions and what potential sticking points would you highlight?

Our top tips for a smooth closing include the following:

• Engage all professional advisers early, including legal, financial and tax advisers.
• Identify and plan for all regulatory and third-party approvals as early as possible.
• Conduct detailed pre-sale due diligence and housekeeping on the target.
• Draft clear, well-defined letters of intent or term sheets to reflect the deal's core terms.
• Use closing checklists, dry runs and digital tools (eg, DocuSign) to ensure seamless execution..

Potential sticking points to watch out for include:

• delays in obtaining regulatory, shareholder or third-party approvals;
• disputes over warranties, indemnities and liability limitations;
• unclear roles and misalignment between deal team members at closing;
• logistical hurdles with notarisation and consularisation of documents in cross-border deals; and
• inadequate disclosure of regulatory conditions in public M&A announcements..

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.