Egypt’s merger control regime is governed by Law 3/2005 on the Protection of Competition and the Prohibition of Monopolistic Practices and its Executive Regulations. The Egyptian Competition Authority (ECA) is authorized to review mergers and make decisions on them. The ECA will also handle investigations into failure to notify and gun jumping.
The regime applies to all sectors, but transactions in the financial and telecommunications sectors are subject to sector-specific merger control review. The National Telecommunications Regulatory Authority (NTRA) and the Central Bank of Egypt (CBE) and the Financial Regulatory Authority (FRA) have jurisdiction over these sectors. The ECA cooperates with these authorities on merger control matters.
Over the past 12 months, the ECA has expanded cooperation with the CBE and FRA to facilitate merger control review in the financial and banking sectors. They have also sought to expand cooperation with the NTRA, although these efforts are less developed.
The Executive Regulations define material influence, which is acquired when an individual or entity acquires at least a 25% stake in an undertaking.
Neither the Competition Law, Executive Regulations, nor the Guidelines provide for specific exemptions. However, in certain cases the ECA may exempt a transaction from the application of the Egyptian merger control regime on a case-by-case basis. The ECA may — with the approval of the Council of Ministers — exempt transactions that meet the notification requirements from the filing obligation, if the transaction does not raise competition concerns.
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The ECA has authority to call in deals that should have, but have not, been notified. In addition, such failure to notify may incur penalties if the deal is closed prior to clearance from the ECA. They do not have authority to call in below threshold transactions.
For the people most affected by the Egyptian merger control regime, the recent amendments to the Competition Law will likely have a significant impact. The amendments will provide the ECA with authority to directly impose administrative fines, which may lead to increased enforcement and more severe penalties for non-compliance. Additionally, the establishment of a new independent committee to review appeals against ECA decisions may provide a more efficient and effective process for resolving disputes.
Egypt is a Member State of the Common Market for Eastern and Southern Africa (COMESA) and participates in merger control review by the COMESA Competition and Consumer Commission (CCCC). However, Egypt continues to disregard the COMESA merger control regime’s one-stop-shop principle, requiring parties to make a separate filing to the ECA, even if they make a filing to the CCCC for the same transaction.
The ECA has executed several memoranda of understanding (MoUs) with regulators in Africa, the Middle East, and Eastern Europe, providing for information exchange on ongoing merger control review and enforcement. They have also played a key part in establishing the Arab Competition Network (ACN), which aims to expand interagency cooperation among Arab League member countries.