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- Merger Control Regime
- Merger Screening
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1.1 Membership of Supranational Organization
1.1.1 Is the jurisdiction a member of/party to a supranational jurisdiction?
1.1.2 Is the jurisdiction itself a supranational jurisdiction?
Yes, the Central African Economic and Monetary Community (CEMAC) is a regional competition law regime.
The regulation that formed CEMAC was enacted in 1999, but whereas the CEMAC council was dormant until recently, the CEMAC has now become active in enforcing the merger Regulation.
The CEMAC comprises six Member States, i.e. Cameroon, Chad, the Central African Republic, the Republic of Congo, Equatorial Guinea and Gabon.
Together these Member States form an economic and monetary union and make use of the CAF (the Central African Franc) as their single currency.
1.1.3 If the answer to Section 1.1.1 and/or 1.1.2 above is in the affirmative, what are the implications hereof?
The CEMAC Merger Regulation is based on a "one-stop-shop" principle. This means that if either of the thresholds described in Section 2.3.1 under the Merger Screening Schedule is met, the transaction must be notified only to the CEMAC Commission, which has exclusive jurisdiction to review the transaction, and the national authorities of the respective member states are precluded from applying their own merger control rules to the transaction.
However, of the CEMAC member states, only Cameroon presently has an actively enforced merger control regime. Gabon has competition legislation in place but does not appear to be actively enforcing it at the time of writing.
At the time of writing there are no national merger control regimes in the Republic of Congo, Equatorial Guinea, Chad or the Central African Republic.
2. Nature of merger control regime
2.1 Mandatory or voluntary
2.1.1 Is filing mandatory or voluntary?
2.2 Suspensory effect
2.2.1 Must completion of the transaction await clearance by the relevant authorities?
Completion of the transaction must await clearance by the CEMAC Commission.
1. What type of transactions are caught by the merger control regime?
1.1.1 Type of transactions that are caught by the merger control rules?
The following types of transaction resulting in a ‘concentration’ are caught by the merger control rules when:
(i) two or more previously independent undertakings merge;
(ii) one or more undertakings acquire directly or indirectly, whether by purchase of shares, by contract or any other means, control of all or parts of one or more other undertakings;
(iii) a joint venture is formed which performs on a lasting basis all the functions of an autonomous economic entity.
Under the CEMAC merger control Regulation, the following “concentrations” are exempt from merger filing:
(i) where financial institutions or insurance companies, whose normal activity includes transactions in and trading of securities on their behalf or on behalf of others, hold on a temporary basis, interests in a business which they have acquired for resale;
(ii) where control is exercised on an interim basis by a company mandated by the public authority under the legislation of a member state in the context of a judicial redress or business bankruptcy procedure.
1.2 Joint ventures
1.2.1 What types of joint ventures are caught by the merger control rules?
Please see Section 1.1.1 above.
1.3 Definition of "control"
1.3.1 How are the concepts of "control" and "change of control" defined?
‘Control’ is defined as rights derived from contracts or other means that confer, individually or jointly, and in light of the circumstances of fact or law, the possibility of exerting a decisive influence on the activity of a business, including i) property or enjoyment rights over all or part of a company's property, and ii) rights or contracts relating to the composition, deliberations or decisions of a company's governing bodies.
2. Establishing jurisdiction for notification of mergers
2.3 General thresholds
Concentrations that have a ‘community dimension’ must be notified to the Community Competitiveness Council of the Central African Economic and Monetary Community (CEMAC).
A transaction has a ‘community dimension’ if:
- the undertakings concerned had a combined turnover exceeding XAF 10,000,000,000 in the common market in last financial year, or
- the undertakings concerned together hold more than 30% of the market.
To have a “community dimension” and be notifiable, the concentration operation must also be likely to have an effect (nexus) in at least in at least two CEMAC member states.
2.3.2 For each threshold, can the threshold be triggered by only one undertaking having local turnover?
Whilst in theory the answer is yes, this appears to be undecided. To have a “community dimension” and be notifiable, the concentration operation must be likely to have an effect (nexus) in at least in at least two CEMAC member states.
2.3.3 For each threshold, can the threshold be triggered without any undertaking having local turnover?
2.5 Foreign-to-foreign mergers
2.5.1 Do any exemptions, special thresholds etc. apply to foreign-to-foreign mergers, i.e. where none of the undertakings concerned is domiciled in the jurisdiction?
Transactions exceeding the jurisdictional thresholds must be notified to the Community Competitiveness Council regardless of the activity and location of the head office of the undertakings concerned as long as they are likely to have an effect (nexus) on competition in the CEMAC market, usually interpreted as having such impact in at least two CEMAC member states.
3. Calculation and allocation of turnover, asset value, transaction value etc.
3.1 Relevant turnover
3.1.1 How is turnover defined (e.g. is income from other sources than "ordinary activities to be included, and how are rebates, taxes, internal turnover etc. treated)?
The relevant turnover to be taken into account is the net turnover derived from the sale of products and the provision of services falling within the undertakings' ordinary activities after deduction of tax.
3.2 Relevant period for calculation of turnover
3.2.1 Which financial year(s) is relevant for the calculation of turnover?
The CEMAC merger Regulation does not state which financial year is relevant for the calculation of turnover for the purpose of the threshold. However, since fines for violation of the merger Regulation is calculated based on turnover in the last financial year, it may be assumed that the last financial year is also that which is relevant for the calculation of turnover in the context of the turnover threshold.
1. Practical information
1.1 Responsibility for filing
1.1.1 The parties responsible for filing?
Notification is the responsibility of the individual or corporation who acquires control of all or part of the business or, in the case of a merger or the creation of a joint venture, all undertakings concerned who must then jointly notify the transaction.
1.2 Deadlines for filing
1.2.3 What are the sanctions for not filing a notifiable transaction?
Failure to notify a notifiable transaction, as well as implementation of a concentration before a decision is made by the CEMAC Commission is sanctionable by a fine not exceeding either of:
(i) 10% of the global pre-tax turnover of all the undertakings concerned in the last financial year; or
(ii) 20% of the pre-tax turnover in the common market of the undertakings concerned in the last financial year.
The following offences are sanctionable by a fine not exceeding 5% of the pre-tax turnover of the undertakings concerned in the last financial year in the common market:
- Giving inaccurate or distorted indications during a notification;
- Providing inaccurate information in response to a request from the Community Competitiveness Council;
- Present incomplete, or failure to submit, information required by the Community Competitiveness Council for its audit.
If a merger which is incompatible with the common market has been implemented, the CEMAC Commission may order the separation of the joint ventures or assets, the termination of control, or any other appropriate remedy, to restore effective competition.
and last updated on 18-02-2021 by
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