Egyptian Merger Control Regime Set to Launch on June 2024

The Egyptian Competition Authority (ECA) has announced the implementation of the country’s first pre-closing merger control regime, effective from June 1 2024. This comes in the wake of comprehensive preparations, including the release of relevant notification forms, detailed guidelines, and a Q&A document aimed at aiding compliance and facilitating the transition for businesses.

Background

The foundation for this new merger control policy was laid on December 29 2022, when Egypt amended Law No. 3 of 2005 on Protecting Competition and Preventing Monopolistic Practices, commonly known as the Competition Law. This amendment introduced the pre-closing merger control system, aligning Egypt’s competition regulations with international standards. However, the regime’s activation was delayed until the necessary procedural details were finalized through executive regulations.

On April 4 2024, the Egyptian government issued the amended executive regulations under Ministerial Decree No. 1120 of 2024. These regulations outline the new filing procedures and provided a tolerance period until  June 1 2024 for businesses to prepare for compliance.

New Guidelines and Support Materials

In anticipation of the upcoming changes, the ECA published the Economic Concentration Review Guidelines on May 26 2024. These guidelines, along with a comprehensive Q&A document, are designed to clarify the ECA’s expectations and offer practical advice for businesses navigating the new merger control requirements.

Key Features of the Guidelines

The newly issued guidelines emphasize several critical aspects of the merger control regime:

1. Notification Requirements: Detailed procedures for submitting merger notifications, including the types of transactions that must be reported and the information required for each submission.
2. Review Process: Clear timelines and stages for the ECA’s review process, outlining how long parties can expect the evaluation to take and the criteria used to assess economic concentration.
3. Thresholds and Exemptions: Specific thresholds for transactions that trigger mandatory notification, as well as potential exemptions based on the scale and impact of the merger.
4. Compliance and Penalties: Information on compliance expectations and the penalties for non-compliance, designed to ensure that businesses adhere to the new regulations.
5. Practical Guidance: Practical advice for businesses on how to prepare for and navigate the new regime, including tips on compiling necessary documentation and understanding the ECA’s evaluation criteria.

Implications for Businesses

The introduction of a pre-closing merger control regime marks a shift in Egypt’s approach to competition regulation. Businesses planning mergers or acquisitions will now have to incorporate these new requirements into their strategic planning and transaction processes to ensure compliance and avoid potential penalties.

The ECA’s approach in issuing detailed guidelines and support materials aims to ease this transition and promote smooth implementation of the new regime by providing clear instructions and addressing common concerns to foster a competitive and fair market environment in Egypt.

As Egypt moves toward the enforcement of its new merger control regime, the ECA’s efforts to clarify and support the implementation process will be crucial. Businesses operating in Egypt are advised to familiarize themselves with the new guidelines and prepare to navigate the evolving regulatory landscape.

Source: White Case