Introduction of the Pre-Merger Control Regime in Egypt
Egypt has ushered in a new era in its competition law framework with the full implementation of the pre-merger control regime, as outlined in Prime Minister Decree No. 1120 of 2024 amending the Competition Law Executive Regulation, issued on 4 April 2024 (the “Executive Regulation”).
This significant development follows the amendment of the Competition Law No. 3/2005 in December 2022 through Competition Law number 175 for the year 2022 (the “Competition Law”), which introduced substantive merger control for the first time in Egypt.
Check out this blog to explore Egypt’s Competition Law Evolution and understand the implementation of the Pre-Merger Control Regime with Decree No. 1120 of 2024.
Scope of Economic Concentrations
The new Executive Regulations define (“economic concentration“) to include transactions that substantially alter control dynamics within companies. This includes mergers, acquisitions, and full-function joint ventures that establish new, independent entities. Additionally, any changes of control leading to significant influence or control over an entity fall under this definition.
Market Analysis and Market Dominance
Under the Executive Regulation, market analysis and market dominance are assessed based on various factors, including market share, financial resources, and barriers to entry for competitors. Markets are delineated based on products and geographical regions.
Thresholds and Calculations
The Competition Law sets specific thresholds for merger clearance, which the Executive Regulation now make operational. These thresholds are based on annual turnover in Egypt and global combined turnover or assets. The calculations are based on the consolidated financial statements of the parties from the preceding business year.
Territorial Application and Filing Procedures
The new regime applies to both domestic and foreign transactions meeting the thresholds. Entities engaged in such transactions must notify the Egyptian Competition Authority (the “ECA”), providing detailed information about the transaction and its impact on competition. The filing fees are proportionate to the transaction’s scale and range from 80,000 EGP to 100,000 EGP (approx. USD 2,000).
Review Process and Appeals within the Pre-Merger Control Regime
The ECA has 30 working days to review a transaction, extendable by another 15 days. If no decision is made within this period, the transaction is automatically approved. However, the ECA can opt for a second review lasting up to 60 days, with a possible 15-day extension. Decisions on economic concentrations can be appealed within 30 days of notification.
Implementation Date Implementation Date of the Pre-Merger Control Regime
The new pre-merger control regime is effective from 1 June 2024. Transactions pending completion by this date must obtain ECA clearance before consummation. This implementation timeline provides parties with a window to complete pending transactions in compliance with the new regime.
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