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Thailand

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North and Central America
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Trinidad & Tobago
United States
South America
Argentina
Bolivia
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EGYPT

Dr. Amir Nabil Ibrahim
Partner at I&D’s Competition
and Trade Department

ani@id.com.eg

May Reda Ibrahim
Associate at I&D’s Competition
and Trade Department

mri@id.com.eg

Mounir Hany
Associate at I&D’s Competition
and Trade Department

mha@id.com.eg

Farah Ahmed Bahgat
Junior associate at I&D’s Competition
and Trade Department

Confirmed up-to-date: 17/12/2024

(Content available free of charge at Mergerfilers.com - sponsored by Ibrachy & Dermarkar )

Relevant legislation and authorities

1) Is a merger control regulation in force?

Yes. Merger control law in Egypt was introduced by Law No. 175 of 2022 which amended Law No. 3 of 2005 on the Protection of Competition and the Prohibition of Monopolistic Practices (ECL). The Executive Regulations (ERs) issued by Prime Ministerial Decree No. 1120 of 2024, amending Decree No. 1316 of 2005, complement the provisions of the Merger Control Law. Both constitute the Egyptian merger control regime.  

2) Which authorities enforce the merger control regulation?

The Egyptian Competition Authority (ECA) enforces the Egyptian Competition Law including the merger control provisions contained therein. However, mergers occurring within sectors regulated by the Financial Regulatory Authority (FRA), typically falling under the non-banking financial sector, are instead subject to the FRA's oversight and control.

3) Relevant regulations and guidelines with links:

The merger control regime is contained in the Egyptian Competition Law. More detailed rules may be found in the Executive Regulations of the Law, particularly the Prime Ministerial Decree No. 1120 of 2024 and the Guidelines issued by the Egyptian Competition Authority. Links to the relevant legislation, guidelines and forms are listed here:

Merger Control

Original Arabic version

Unofficial English translation

Law No.3 of 2005 on the Protection of Competition and the Prohibition of Monopolistic Practices as amended by Law No. 175 of 2022.

 

English translation of the latest version of the Law is not currently available. Here is a link to an English translation of the previous version of the Law: Law No 3 of 2005 Promulgating the Law on Protection of Competition and Prohibition of Monopolistic Practices

Prime Ministerial Decree No. 1316 of 2005, the Executive Regulations of the Protection of Competition and the Prohibition of Monopolistic Practices Law No. 3 of 2005 as amended by the Prime Ministerial Decree No. No. 1120 of 2024. 

English translation of the latest version of the Executive Regulations is not currently available. Here is a link to an English translation of the previous version of the Executive Regulations: 

Prime Ministerial Decree No. 1316 of 2005 Issuing the executive regulations of Protection of Competition and Prohibition of Monopolistic Practices law No. 3 of 2005

Guidelines on the Control of Economic Concentrations according to the provisions of the Egyptian Competition Law

Control of Economic Concentrations according to the provisions of the Egyptian Competition Law

Q&As on the ex-ante control of economic concentrations

Q&As concerning the ex-ante control of economic concentrations pursuant to Law no. 3/2005 on the Protection of Competition and Prohibition of Monopolistic Practices and its amendments

Economic Concentration Notification File to the ECA can be downloaded in word version through the links below: 

Full Notification File: جهاز حماية المنافسة ومنع الممارسات الاحتكارية - ملف إخطار التركز الاقتصادي إلى الجهاز

Simplified Procedure File: جهاز حماية المنافسة ومنع الممارسات الاحتكارية - ملف الإخطار وفقًا للإجراءات المبسطة

Economic Concentration Notification File to the ECA in English Language can be downloaded in word version through the links below: 

Full Notification File: Egyptian Competition Authority - Economic Concentration Notification File

Simplified Procedure File: Egyptian Competition Authority - Notification File - Simplified Procedures

Notification File of the Financial Regulatory Authority can be downloaded in word version through this link: جهاز حماية المنافسة ومنع الممارسات الاحتكارية - ملف إخطار الهيئة العامة للرقابة المالية

Notification File of the Financial Regulatory Authority in English Language can be downloaded in word version through this link: Notification File of the Financial Regulatory Authority

Notification Thresholds and Fees Calculator"

جهاز حماية المنافسة ومنع الممارسات الاحتكارية - حاسبة حدود ورسوم الإخطار

(Translation into English not available yet)

Published Notified Economic Concentrations and their updated status

 

(Translation into English not available yet)

4) Does general competition regulation apply to mergers or ancillary restrictions?

Indeed, prohibition of anti-competitive agreements including both horizontal and vertical agreements and the prohibition of abuse of dominant market position, may apply to mergers that do not meet the thresholds for merger control. In fact, prior to the issuance of the new merger control law, the ECA used to apply the substantive provisions prohibiting anti-competitive agreements to scrutinize certain mergers, through the infamous Continental Can doctrine. 

Under the current merger control law, mergers satisfying the legal thresholds will be subject to the specific provisions addressing merger control for both their procedural and substantive aspects.

The ECA’s policy regarding ancillary restraints control is still unclear. From one side, in its formal communications with stakeholders, particularly during official events, the ECA has indicated that ancillary restraints require specific approval from the ECA and are not automatically covered by the clearance decision of the merger. Nonetheless, it is safe to argue that ancillary restraints that are considered as inherent parts of the merger will be cleared as part of the clearance decision of the merger itself and will not be subject to separate scrutiny under the general competition regulation. However, restrictions that go beyond what may be considered ancillary may be caught by the general prohibition on anti-competitive agreements

For mergers that do not meet the legal thresholds, the new law has a specific provision whereby the ECA has the option to review any merger falling below the financial thresholds if the ECA's board approves such intervention and if the transaction is likely to raise competition concerns. In this situation, filing is not mandatory, and the ECA has a one-year deadline from the date of consummation to intervene.

In such instances, the ECA’s powers are strictly limited to imposing behavioral remedies; in other words, it cannot block the transaction.

There are two cases before the enactment of the merger law whereby ECA has used the substantive provisions tackling horizontal agreements and abuse of dominance to tackle mergers. Whether these provisions will continue to play a role after the enactment of merger law remains doubtful. Nevertheless, substantive gun jumping will be likely tackled as information exchange between competitors.

5) May an authority order a split-up of a business irrespective of a merger?

Yes, under the ECL, divestitures will likely be considered as one of the structural remedies that the ECA can impose on undertakings to mitigate the anti-competitive effects of a certain behavior in a given market. Such anti-competitive effect may be the result of a horizontal agreement, a vertical agreement, an abuse of dominance or an economic concentration (i.e., mergers, acquisition, and joint ventures). 

In principle, the ECL grants the ECA the authority to impose such remedies in cases of infringement or within the context of economic concentrations (mergers included). However, a review of the ECA's decisional practice reveals that it rarely resorts to divestitures or other structural remedies. Instead, the ECA tends to favor the imposition of behavioral remedies to address anti-competitive concerns.

6) Other authorities that also require merger filing or may prohibit transaction
(Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)

Non-Banking Financial businesses

Mergers involving non-banking financial businesses such as capital markets, futures exchanges, insurance activities, real estate financing, financial leasing, factoring, consumer finance, securitization, and movable guarantees and which fall under the Financial Regulatory Authority’s (FRA) supervision shall be notified to the FRA (and not to the ECA). The FRA is obligated to consult the ECA on the transaction; the latter’s opinion is – however – non-binding for the FRA. 

Banking Sector  

Similarly, economic concentrations (mergers included) within the banking sector are not subject to the ECA’s merger control regime. This is because the banking sector is explicitly exempted from the scope of the ECA. Therefore, mergers occurring within the banking sector are subject to the Central Bank of Egypt’s control. 

Foreign Investment Control

There are no foreign investment control regimes.

7) Are any parts of the territory exempted or covered by particular regulation?

No. The merger control regime applies equally to the entire Egyptian territory. 

Voluntary or mandatory filing

8) Is merger filing mandatory or voluntary?

Merger filing is mandatory, provided the legal thresholds are met.

Types of transactions to file – what constitutes a merger

9) Is there a general definition of transactions subject to merger control?

Yes, according to the Egyptian Competition Law, merger control applies exclusively to transactions that legally qualify as Economic Concentrations. According to Article 2 of the Law, a transaction is considered an economic concentration if it results in any change of control or material influence over one or more of the undertakings involved. This may arise from traditional mergers, acquisitions, or fully functioning joint ventures.

In other words, a merger falls within the definition of an economic concentration if it leads to a change in the effective influence over an undertaking's economic decisions or the ability to influence its policy, including strategic decisions and commercial objectives.

10) Is "change of control" of a business required?

No, the Egyptian merger control regime has a broad scope of application as an Economic Concentration will be considered to take place if the transaction results in a change of control or material influence over a business that does not necessarily qualify as a change of control  (see topic 12) which may result in traditional mergers, acquisitions and/or fully functioning joint ventures.

11) How is “control” defined?

The Egyptian Competition Law states that “control” is defined as the ability of the controlling person or persons to exercise effective influence, directly or indirectly, by directing the economic decisions of other entities. This control may be obtained through a majority of voting rights, the ability to prevent economic decisions (veto rights), or any other means. It includes any situation, agreement, or ownership of shares or quotas, regardless of their percentage, that leads to actual control over management or decision-making.

The Guidelines published by the ECA further clarify that control can also be established through acts that result in the ownership of or right to use and exploit most or all of another entity's assets. It may also involve acquiring rights that enable the controlling person to appoint the majority of the board members, control the board of directors' decisions, or influence general assembly meetings. Additionally, control may exist when more than half of the board members or general assembly members are the same individuals in both the acquiring and the target entities.

12) Acquisition of a minority interest

Acquisition of a minority interest is captured by the concept of material influence and is subject to the merger control under certain predetermined conditions. The concept of material influence was introduced to address transactions that do not necessarily result in a change of control through the acquisition of a majority of voting rights or veto rights, but still enable influence over a party's policies and commercial objectives. As a general rule, and pursuant to the Executive Regulations, if less than 10 percent of the total voting rights, shares, or equity is acquired, there is a presumption that no material influence is acquired, unless the acquirer is classified among the three largest shareholders or stakeholders of the target entity.

  1. According to the Egyptian Competition Law, material influence is defined as the ability to directly or indirectly influence the policy of another entity, including its strategic decisions and commercial objectives. The Executive Regulations further adds a list of specific cases where material influence may be assumed. For instance, acquiring ownership of more than 25% of the total voting rights, shares, or equity of another entity is considered material influence. However, ownership of less than 25% may still constitute material influence if accompanied by other factors likely to affect the target entity’s policies. These factors may include: The percentage of the acquirer's voting rights compared to others, which enables the acquirer to influence the target's policies and commercial objectives.
  2. Provisions in the articles of incorporation or shareholder agreements that grant the acquirer privileged voting or veto rights.
  3. The presence of one or more representatives of the acquirer on the board of directors of the target entity.
  4. The existence of common shareholders and/or stakeholders between the acquirer and the target entity.

13) Joint ventures/joint control – which transactions constitute mergers?

Under Egyptian Competition Law, specific criteria must be met for a joint venture to qualify as an Economic Concentration subject to the merger control regime. Notably, the joint venture must be "fully functioning." According to Article 2 of the Egyptian Competition Law, establishing a joint venture or the acquisition of an existing entity by two or more parties for the purpose of forming a joint venture constitutes an Economic Concentration if the entity operates independently and on a permanent basis. This means merger control provisions apply exclusively to fully functioning joint ventures.

To determine whether a joint venture meets this standard, the ECA’s Guidelines provide a detailed assessment framework, closely aligned with the European Union's approach. The joint venture must engage in economic activities beyond serving a single function for its parent entities, possess its own resources, and conduct sales and purchasing activities that extend beyond dealings with its controlling entities. 

A joint venture that is not “full function”, because it does not, on a lasting basis, perform all the functions of an autonomous economic entity, is not subject to merger control but may be scrutinized under the general prohibition on anti-competitive agreements. 

Furthermore, joint ventures that do not qualify as economic concentration because they fall below the financial thresholds, may still be subject to review if they are deemed to have anti-competitive effects in the relevant market. This is consistent with a general exception in the law allowing the ECA to examine transactions below financial thresholds if approved by the ECA's board and if competition concerns arise. However, the ECA must intervene within one year of the transaction's consummation.

Thresholds that decide whether a merger notification must be filed

14) Which thresholds decide whether a merger notification must be filed?
(Unless explicitly stated otherwise, the thresholds described under one threshold category are not cumulative with those described under another category. Thus for instance if there is a market share threshold and a turnover threshold, it is sufficient to meet one of these, unless stated otherwise.)

a) Turnover thresholds

An Economic Concentration, including mergers notification must be filed if either of the following thresholds are met:

  1. Domestic Notification Thresholds: The combined aggregate local annual turnover of the parties exceeds 900 million EGP, and the annual turnover in Egypt of at least two of the parties concerned exceeds 200 million EGP each, separately.
  2. Worldwide Notification Thresholds: The combined aggregate worldwide annual turnover of the parties exceeds 7.5 billion EGP, and the annual turnover realized in Egypt by at least one of the concerned parties exceeds 200 million EGP.

For below thresholds mergers, the ECA may call-in a merger (see topic 25).

b) Market share thresholds

N/A

c) Value of transaction thresholds

N/A

d) Assets requirements

N/A

e) Other

N/A

15) Special thresholds for particular businesses

N/A

16) Rules on calculation and geographical allocation of turnover

Rules on calculation of turnover are contained in the Executive Regulations, which specify that the annual turnover or aggregate asset value is determined based on the combined figures from the most recent consolidated financial statements of the parties involved in the transaction. Sellers are excluded from this calculation only if they exit the target entity after the transaction is completed. However, if the sellers remain part of the related parties of the target entity post-transaction, their turnover, along with that of their related parties, is deemed part of the turnover calculations for the parties to the economic concentration. Related parties are defined by the ERs as entities or individuals where:

  1. The majority of shares or interests in one entity are directly or indirectly owned by the other or by a single party.
  2. One party exercises actual control over another, including through familial relationships up to the second degree. Actual control encompasses any arrangement, agreement, or ownership of shares or interests, regardless of percentage, that allows control over management or decision-making.

For geographical allocation, a local nexus is required by the Law, i.e., it is required that a certain turnover is realized by the parties (or at least one of them) in Egypt. Such turnover may be realized whether directly by one of the parties to the transaction, or through its related parties.

The Executive Regulations further clarify that if the annual turnover or aggregate asset value is expressed in a foreign currency, it should be converted into Egyptian pounds using the official foreign exchange rate announced by the Central Bank of Egypt on the last day of the financial year of the parties involved in the merger.

Is the seller/seller's group turnover relevant in a standard acquisition of sole control?

In a standard acquisition of sole control, the seller's or seller's group turnover is generally not relevant, provided the seller exits the target entity upon consummation of the transaction.

However, if the seller retains a relationship with the target entity—such as remaining part of its related parties (i.e., the majority of the seller's shares or interests are directly or indirectly owned by the target entity or vice versa, or both the seller and the target entity have their majority shares owned by the same legal entity, or the target entity exercises actual control over the seller or vice versa (see topic 16). then the seller’s turnover and that of their related parties must be included in the turnover calculations of the parties to the economic concentration.

17) Special rules on calculation of turnover for particular businesses

N/A

18) Series of transactions that must be treated as one transaction

The Egyptian Competition Law does not explicitly address the treatment of interdependent transactions. However, the ECA has clarified through formal communications during official events that share, or asset swap agreements are generally treated as two separate transactions. This is because such transactions are not necessarily interrelated, therefore, each transaction must be assessed on its own merits for its potential impact on market competition. As a result, the parties involved are required to file two distinct notification files, one for each transaction. 

That said, when transactions are demonstrably interrelated, it can be argued that the ECA is likely to take this interrelation into account during the substantive evaluation, even if they are procedurally treated as separate transactions.

It is important to note that in cases involving a series of transactions, it is very likely that the ECA will assess each acquisition of control or material influence that qualify as economic concentration as a separate transaction.

Exempted transactions and industries (no merger control even if thresholds ARE met)

19) Temporary change of control

The Egyptian Competition Law does not explicitly require that a change of control must be lasting for a transaction to be notifiable. Consequently, transactions involving a change of control, even if temporary, may still trigger notification obligations under the merger control regime. 

However, for certain industries the Law provides that temporary acquisitions are exempted from merger control even if the thresholds are met, this pertains to the temporary acquisitions of securities (See topic 20).

20) Special industries, owners or types of transactions

The Egyptian Competition Law specifies that there is no obligation to file a merger notification in the following situations:

  1. mergers and acquisitions between parties belonging to the same group/entity as such transactions are seen as restructuring efforts that do not result in a change of control or substantial influence over the entity. 
  2. Temporary acquisitions of securities by licensed entities, provided the securities are resold within one year of acquisition provided that during this period, the acquirer does not exercise any voting rights or take actions that could influence the target entity’s strategic decisions or commercial objectives. 

21) Transactions involving only foreign businesses (foreign-to-foreign)

Foreign-to-foreign mergers are only notifiable if at least one of the concerned parties, including its related parties, realizes an annual turnover in Egypt that exceeds 200 million EGP, provided that the combined turnover realized elsewhere by the parties to the transactions exceeds 7.5 billion EGP. This means that for a merger to be notifiable to the ECA a local nexus is required by the Egyptian Competition Law.

22) No overlap of activities of the parties

There is no exemption for transactions with no overlap of activities, but there is a simplified procedure available if there is no overlap. 

According to the ECA’s Guidelines, conglomerate economic concentrations between persons operating in markets that are not horizontally or vertically related or otherwise related to each other, is subject to a simplified filing procedure. 

23) Other exemptions from notification duty even if thresholds ARE met?

N/A

Merger control even if thresholds are NOT met

24) May a merging party file voluntarily even if the thresholds are not exceeded?

Yes, parties may always choose to voluntarily notify a non-notifiable transaction (e.g., a transaction below the financial threshold) to avoid potential later intervention by the ECA (see topic 25).

25) May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?

Yes, the Egyptian Competition Authority is allowed to review any economic concentration that does not meet the financial thresholds provided in the Law, if the ECA’s board approves such intervention and if the transaction is likely to give rise to competition concerns. In this case, the ECA will have a deadline for intervention of one year from the date of consummation. This mechanism was introduced in the Law specifically to address killer-acquisitions.

Referral to and from other authorities

26) Referral within the jurisdiction

Referrals within jurisdiction are likely when parties to a merger in the non-banking financial sector submit their notification to the ECA. In such cases, the ECA will determine that it lacks jurisdiction and will refer the file to the FRA. Similarly, if parties to a merger in an industry outside the FRA's jurisdiction submit their notification file to the FRA, the FRA will also determine it lacks jurisdiction and refer the matter accordingly (see Topic 6).

27) Referral from another jurisdiction

N/A

28) Referral to another jurisdiction

N/A

29) May the merging parties request or oppose a referral decision?

N/A

Filing requirements and fees

30) Stage of transaction when notification must be filed

The Law does not provide for specific notification deadlines. However, the parties to the merger must submit the complete notification file prior to the consummation of their transaction if it qualifies as an economic concentration meeting one of the notification thresholds. However, the ECA’s Guidelines provide for instances during which it is preferable to submit the notification file. In fact, the merging undertakings are advised to do so following the conclusion of one of the following acts/agreements which indicate that the implementation of the merger is imminent: 

  • The conclusion of a memorandum of understanding or letter of intent (preliminary agreement).
  • The commencement of serious negotiations on the concentration.
  • The announcement of the purchase offer.
  • The conclusion of any other agreement that may lead to the acquisition of control or material influence.

31) Pre-notification consultations

The Egyptian Competition Authority encourages pre-notification consultations. The merging parties (i.e. the parties to the transaction) are advised to voluntarily contact the ECA prior to the formal submission of the notification file in order to ensure their compliance with the entire process. 

In all cases, and since pre-notification consultation is not mandatory, the deadlines for the ECA will only start to run from the date of receipt of a complete notification file. 

32) Special rules on timing of notification in case of public takeover bids and acquisitions on stock exchanges

The Law does not provide a specific treatment for mergers in case of public takeovers or the acquisitions of stock exchanges. This means that public takeovers meeting the criteria for notifiable economic concentrations are governed by merger control regulations akin to those applied to other transactions whether to the ECA or the FRA as the case may be.

Therefore, they should be notified prior to the consummation of the transaction (see topic 30).

33) Forms available for completing a notification

There are two forms available: one for simplified notification and one for full notification. Both are available in Arabic and English versions (see links under topic 3).

Simplified notification is possible in each of the following cases:

  1. In case the persons concerned with the economic concentration meet the domestic notification thresholds, if the annual turnover or the value of assets in Egypt of the persons concerned with the economic concentration combined do not exceed EGP 2 billion for the latest year in the last audited consolidated financial statements.
  2. In case the persons concerned with economic concentration meet the worldwide notification thresholds, if the annual turnover in Egypt of the target person does not exceed EGP 500 million for the latest year in the last audited consolidated financial statements.
  3. Establishing or acquiring a joint venture that carries out an independent and permanent economic activity outside the Arab Republic of Egypt.
  4. Establishing or acquiring a joint venture that carries out an independent and permanent economic activity in markets that are not horizontally or vertically related or otherwise related to the markets in which the parent companies operate.
  5. Conglomerate economic concentrations between persons operating in markets that are not horizontally or vertically related or otherwise related to each other.
  6. Acquisition of sole control over one or more persons after the acquiring person or persons exercised joint control over the same person.

34) Languages that may be applied in notifications and communication

Pursuant to Article 56 of the Executive Regulations, the documents of the notification file shall be submitted entirely in Arabic and, if not, an Arabic translation shall accompany the submission of the acquiring entity.

For certain documents, particularly lengthy and complex ones such as merger agreements or shareholders' agreements, the ECA may not require a full translation of the entire document. Instead, it may request a summary in Arabic that highlights the material aspects of the document and the transaction.

35) Documents that must be supplied with notification

The following documents should be supplied with a merger notification:

  1. Corporate documents
  2. Board and/or shareholders’ assembly resolutions ratifying the economic concentration
  3. Financial statements
  4. Letter of intention/memorandum of understanding, sale and purchase agreement or any other document demonstrating the change of control or the material influence
  5. Power of attorney. The power of attorney issued abroad must be notarized at the Egyptian embassy. It must then be legalized by the Egyptian Ministry of Foreign Affairs.

36) Filing fees

The filing fees depend on the total combined turnover of the merging parties or the value of the assets. They range from eighty thousand (80,000) EGP to one hundred thousand (100,000) EGP. 

Total Combined Turnover or Value of Assets (EGP)

Filing Fees

From EGP 900 million to less than EGP 1 billion

80,000 EGP

From EGP 1 billion to EGP 1.5 billion

90,000 EGP

More than EGP 1.5 billion

100,000 EGP

In case the Worldwide notification thresholds are met

100,000 EGP

Implementation of merger before approval – “gun jumping” and “carve out”

37) Is implementation of the merger before approval prohibited?

Yes. Economic concentrations which are subject to the notification obligation cannot be consummated/implemented prior to clearance, i.e prior to an approval decision by the ECA. 

38) May the parties get permission to implement before approval?

Neither the Law nor the Guidelines provide for any exemptions from the standstill obligation imposed on the merging parties. Therefore, the parties to a notifiable merger cannot implement the transaction before the ECA has issued a clearance decision. 

39) Due diligence and other preparatory steps

According to the ECA’s guidelines, due diligence is generally allowed before the approval decision is obtained, however, it must be conducted in a way that prevents the exchange of commercially sensitive information and which does not facilitate coordination of the concerned parties’ competitive behaviour in the market.   

Generally, the ECA permits the parties to a merger to undertake the following preparatory actions before obtaining the approval decision:

  1. Sharing publicly available information or any non-confidential information from a competition perspective.
  2. Holding meetings to discuss the details of the proposed merger.
  3. Developing plans to merge the activities of the parties involved in the merger, provided that no actual steps are taken toward implementation.
  4. Conducting meetings specifically aimed at planning the integration of the parties' activities.
  5. Performing due diligence.

40) Veto rights before closing and "Ordinary course of business" clauses

The ECA’s guidelines prohibit the parties to the merger from intervening in the management or the decision-making of the commercial or strategic decisions and commercial objectives of the target business or the marketing of its products. Therefore, a “veto right before closing” or “ordinary course of business” clauses will be assessed on a case-by-case basis to determine to what extent the parties may discuss – or provide each other with veto rights concerning – any decisions in their respective businesses.

41) Implementation outside the jurisdiction before approval – "Carve out"

There are no specific rules on “carve out” of the Egyptian part of a transaction to avoid delaying implementation in the rest of the world pending approval in Egypt.

However, if the merger meets the local nexus criteria within the worldwide thresholds and qualifies as an economic concentration under the Law, the parties are prohibited from consummating the transaction outside Egypt without first obtaining the ECA's approval. This principle is supported by Article 5 of the ECL, which stipulates that the ECA may enforce the law on acts committed abroad if they have an anti-competitive impact on the Egyptian market.

42) Consequences of implementing without approval/permission

The Guidelines provide that a breach of the standstill obligation is punishable by a fine of no less than 1% and no more than 10% of the total annual turnover, assets or the value of the transaction, whichever is higher. 

The process – phases and deadlines

43) Phases and deadlines

Phase

Duration/deadline

Pre-notification phase:

Pre-notification discussions with the ECA are not mandatory, but it is normally advisable to inform the ECA of the intended transaction at an early stage and to enter into pre-notification discussions. 

If the parties want to engage in pre-notification discussions, they must submit a written request (either electronically or on paper). The ECA will respond by scheduling a meeting within two days of receiving the request.

No set duration or deadline

Assessment of completeness of notification:

The ECA reviews the notification file to determine its completeness within a maximum of five working days. If the file is deemed complete, the ECA issues a receipt confirming its completeness through any of the communication methods specified in the notification form, including email.

If the parties submit a complete notification file from the outset, the five working days taken by the ECA to assess the file's completeness are included in the statutory review period. Therefore, the legal review period begins on the next working day following the date of submitting the complete notification file to the ECA.

5 Working Days 

Phase I:

The merger is either approved (with commitments if relevant) or it is decided to initiate a phase II investigation of the merger.

In Phase I of the review, the ECA will decide whether or not to clear the concentration within 30 working days from the day following the filing of the notification, subject to an extension of up to 15 working days if the parties have submitted a commitment proposal. 

During this phase, a board committee (the examination committee) is formed to decide whether to approve the transaction or to refer the case file to a Phase II investigation, the ECA will publish a summary of the transaction to receive third parties’ opinions, it will conduct a preliminary assessment of the economic concentration and respond to the inquiries of the concerned persons. 

After the completion of the Phase I assessment, the examination committee will be entitled to resort to any of the following measures:

  1. lack of jurisdiction;
  2. dismissal if the parties abandon the transaction;
  3. approving the transaction with or without conditions; or
  4. referring the transaction to a Phase II in-depth investigation if the transaction raises serious concerns that it may harm competition in the relevant market. 

30 working days from the date when the notification was complete.

Extension:
15 working days if commitments are offered by one of the parties.

Phase II:

If the concentration is referred to Phase II for a more detailed investigation, the review will take 60 working days from the committee's referral decision. This period can be extended by up to 15 additional working days if the parties submit a commitment proposal.

At the end of this phase, the ECA’s Board of Directors will decide whether to:

  1. Dismiss the file, in the event that the parties abandon the economic concentration.
  2. Approve the economic concentration, if it does not restrict or harm competition in the relevant market.
  3. Conditionally approve the economic concentration, if the undertakings submit acceptable commitments to the ECA.
  4. Reject the implementation of the economic concentration because of its negative impact on competition (restricts or harms freedom of competition).

60 working days from the date when the phase II investigation was initiated.

Extension:
15 working days if the parties submit a commitment proposal.

Assessment and remedies/decisions

44) Tests or criteria applied when a merger is assessed

It is assessed whether the merger will "limit, restrict or harm freedom of competition".

A range of factors may be taken into consideration, including:

  1.  The market structure, along with present or potential competition levels in Egypt, and abroad provided it affects Egypt. 
  2. The market position of the parties including, inter alia, their economic status and solvency compared to the present and potential investments in the market. 
  3. The available alternatives for suppliers, customers, and consumers and their ability to access production resources or relevant markets, as well as the patterns of supply and consumption of the relevant products.
  4. Barriers to entry and expansion in the relevant markets. 
  5. The potential impact of the economic concentration on consumers, and existing or potential investments.
  6. The potential impact of the economic concentration on innovation or development.
  7. The potential negative effects on freedom of competition.

Additionally, a merger may be approved under specific exceptions, such as failing firm efficiencies, economic efficiencies that outweigh the potential anti-competitive effects, or on grounds of national security, provided that the approval of the Council of Ministers is obtained.

45) May any non-competition issues be considered?

Yes, the ECA may allow a transaction for national security considerations.  Such authorization is -however- contingent upon securing the approval of the Council of Ministers. 

46) Special tests or criteria applicable for joint ventures

Joint ventures are not subject to any special substantive test under the ECL. Therefore, the substantive test for joint ventures will be the same as that for mergers, as long as the joint venture falls within the definition of economic concentration set out in the Law, i.e., it is a fully functioning joint venture (see topic 13). 

47) Decisions and remedies/commitments available

The ECA may conduct a one-phase assessment or embark on a second phase depending on the transaction submitted for its review and its potential substantive effects on competition. It is possible for the parties to submit commitments in both phases to the ECA to address the negative effects of the transaction. 

Also, during both phases the ECA may accord a conditional approval for the implementation of the transaction. These conditions naturally intend to remedy the harm, restriction and/or limitation on competition.  

The remedies that the ECA may impose include both behavioral and structural remedies, these may include but are not limited to:  

  1. Refrain from taking any action that would result in the exclusive distribution of a product.
  2. Make basic facilities/services available to competing undertakings. 
  3. Refrain from discriminating in the agreements they conclude with suppliers/customers.
  4. Refrain from conditioning the conclusion of a contract on the acceptance of obligations or the purchase of products that are unrelated to the product subject to the original agreement. 
Publicity and access to the file

48) How and when will details about the merger be published?

The Egyptian Competition Authority is obliged to make a public announcement on the transaction when it has received a complete notification file to enable third parties to be informed of the economic concentration so that they can submit their observations on the transaction within 15 days of the publishing date.

The announcement is typically made on the official website of the ECA and generally includes information such as the identities of the parties to the transaction, a brief overview of the transaction, and whether the parties are active in the Egyptian market. 

49) Access to the file for the merging parties and third parties

The merging parties:

The Law, the ERs and the Guidelines are completely silent regarding the parties' rights to access the file and, more broadly, their rights to due process.

Based on publicly available information, the ECA typically publishes the identities of the parties to the transaction, a brief overview of the transaction, and whether the parties are active in the Egyptian market.

Third parties:

Third parties do not have access to the file; their intervention is limited to the publicly available information disclosed by the ECA in the public announcement made upon receiving a complete notification file.

 However, it is worth noting that the ECA may choose not to publish the notification file if the board decides that there are public interest considerations at stake. (see topic 48). 

Judicial review

50) Who can appeal and what may be appealed?

The ECA has the right to approve or reject the notified merger. In the event of rejection, the parties may appeal the decision within 30 days. In such cases, the ECA will decide whether to endorse the appeal or to reject it. 

The ECA’s decisions are administrative in nature; therefore, after exhausting appeals before the ECA, the parties are entitled to appeal the decisions of the ECA before the competent administrative courts (i.e., the Egyptian State Council) within 60 days of the publication of the decision, or its notification to the parties.


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