Merger notifications in the CEMAC region

Having fully entered into force in 2020, the reform of Community competition law in the CEMAC region (Regulation No. 2019-06 of April 7, 2019, and its implementing regulations of 2020, 2022, and 2023—as well as the guidelines published in 2022) has profoundly changed the rules governing the review of mergers.

key points

Exceeding the community thresholds (notably the threshold of 10 million CFA francs in annual revenue of the companies involved in the transaction) triggers the exclusive jurisdiction of the EU authority, to the exclusion of national authorities.

An acquiring company not yet established in the CEMAC zone may be required to file a notification if the thresholds are exceeded by the target company.

A transaction may be subject to Community oversight even if it involves only a single CEMAC member state.

The procedure is subject to a maximum time limit of six months, after which the transaction is deemed authorized.

The cost of notification, despite the existence of a cap, remains among the highest in Africa.

Other publications

The Competition Law Regime in the CEMAC Zone (Economic and Monetary Community of Central Africa) is characterized by exclusive community jurisdiction once certain thresholds are exceeded, regardless of the number of member states actually involved in the transaction. While this framework provides greater legal certainty, it also raises significant practical issues, particularly regarding the triggering of the notification obligation, procedural costs, and the management of complex or interdependent transactions.

Merger control—that is, the review of transactions through which one or more undertakings acquire, directly or indirectly, whether by acquiring an equity stake, through a contract, or by any other means, control of the whole or parts of one or more other undertakings—constitutes one of the pillars of competition law in the CEMAC region.

Since the Community Competition Council effectively began its work—having appointed its members and held its first meeting on December 16, 2020—mergers and acquisitions involving groups operating in the CEMAC common market have been subject to a strict prior notification regime, accompanied by a suspensive effect and heavy penalties in the event of non-compliance.

In practice, this regime is still not fully understood by economic operators, particularly regarding the conditions triggering the notification obligation and the financial consequences associated with the procedure.

Conditions triggering the notification obligation

Community jurisdiction based on thresholds

A merger falls under Community control if the undertakings involved together achieve, within the CEMAC common market, a turnover exceeding 10 billion CFA francs, or hold more than 30% of a relevant market.

These thresholds serve a key purpose: they determine the exclusive jurisdiction of the Community authority. Once these thresholds are exceeded, national competition authorities no longer have jurisdiction to review the transaction, even if it takes place exclusively within a single member state.

Exclusion of jurisdiction of national authorities

It is common for certain operators to mistakenly believe that a transaction limited to a single CEMAC country should fall under national review. This approach is now clearly rejected: exceeding the Community thresholds is sufficient to trigger the Commission’s jurisdiction, regardless of the transaction’s actual geographic scope.

Key considerations for operators

No Requirement for an Impact in Multiple Member States

Contrary to a sometime misinterpreted reading of European law, CEMAC law does not require that the transaction have effects in at least two Member States. A concentration affecting a single national market may very well fall under CEMAC control if the thresholds are met. This point is now expressly clarified by the interpretative texts adopted by the Commission.

The applicability of the rules to acquirers not yet present in the CEMAC zone

Another point often underestimated: the notification obligation may apply to an Acquirer not yet established in the CEMAC zone.
If the acquirer, together with the target entity, exceeds the revenue or market share thresholds, notification is required, even if the transaction constitutes a first entry into the Community market. The absence of prior local presence is therefore not a ground for exemption.

A procedure subject to a maximum six-month deadline

The review procedure is strictly time-bound. From the receipt of a complete application, including payment of the filing fee, the Commission has a maximum of six months to reach a decision.

Upon expiration of this period, the transaction is deemed authorized, which constitutes an essential guarantee for operators. In practice, transactions that do not raise major competition concerns are often decided upon within a shorter timeframe, provided the application is complete and no requests for additional information are made.

The Issue of Notification Costs

High costs despite the existence of a cap

The fees for notifying mergers in Africa vary significantly depending on the authority, ranging from fixed flat rates to percentages of revenue, assets, or the transaction value, generally accompanied by minimum and maximum thresholds.

In the CEMAC zone, a mandatory filing fee set at 0,25% of revenue generated in the CEMAC common market must be paid concurrently with the submission of the notification.
Community Regulation No. 00087 of March 16, 2022:

specifies that, for the calculation of the revenue serving as the basis for calculating the fees, all activities of the acquiring group must be taken into account, not just the activities of the companies directly involved in the transaction. The base is therefore currently very broad;
caps the amount of fees at 1 billion CFA francs.

Even with this cap, this amount places CEMAC among the most expensive jurisdictions in Africa for merger control, ahead of most comparable regional or national authorities.

By way of illustration, in the COMESA (Common Market for Eastern and Southern Africa) region, fees are set at 0,1% of turnover or assets generated in the common market, capped at USD 200. At the national level, some countries apply relatively moderate proportional rates, such as Botswana (000%), Malawi (0,01%), or Mozambique (0,05%, with a cap), while Morocco bases the calculation on the transaction value (0,11%, with a floor and a cap). Other systems favor flat-rate or progressive scales, such as South Africa (separate flat rates based on the size of the transaction), Namibia (a range that varies according to several combinations of revenue and assets) or Kenya (no fees below a certain threshold, then increasing flat rates). Finally, Nigeria adopts a progressive approach with degressive rates, applied to the higher of the transaction value or annual revenue, with no cap.

Given the very high cap in the CEMAC zone, the corresponding financial burden may prove particularly onerous for medium-sized transactions or regional groups.

The possibility of a single notification for interdependent transactions

One practical point, however, is worth highlighting: when several transactions are legally or economically interdependent, it seems possible to file a single notification, resulting in the payment of fees associated with a single case.

This approach helps avoid a multiplication of costs when the transactions follow the same economic logic (takeovers that are conditional on one another).

Conclusion

The merger control regime in the CEMAC zone is based on a now- established framework: the primacy of Community thresholds and the exclusive jurisdiction of the regional authority. While this framework offers significant legal certainty, it requires operators to exercise greater vigilance prior to transactions, both in analyzing thresholds and in anticipating of timelines and costs.

François NOUVION
Partner