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Content last updated: 25-01-2021

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  • Merger Control Regime
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  • Merger Filing

1. Supranationality

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?


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?

Not applicable.

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 a notifiable transaction must await clearance by the Nigerian Competition Commission.

1. What type of transactions are caught by the merger control regime?

1.1 Concentrations

1.1.1 Type of transactions that are caught by the merger control rules?

A transaction is caught by the merger control rules if one or more undertakings acquire direct or indirect control over the whole or part of another undertaking resulting from:

a merger

acquisition or lease of shares

acquisition of assets

acquisition of an interest in a business

establishment of a joint venture

If financial institutions or insurance companies acquire shares in another company in the course of their normal business for the purpose of reselling them, this does not constitute a concentration as long as such shareholders do not exercise their voting rights and the sale takes place within one year. This one-year deadline may be extended by the Nigerian Competition Commission upon request if sufficient proof is provided that the resale would be unreasonable within the one-year deadline.

For insolvency and liquidation, please see Section 1.3.1 below.

1.2 Joint ventures

1.2.1 What types of joint ventures are caught by the merger control rules?

The creation of joint ventures performing on a lasting basis all the functions of an autonomous economic entity, i.e. a so-called "full-function" joint venture, are caught by the merger control rules.

However, given the rather flexible notion of what constitutes a “joint venture”, it may be difficult to determine whether a joint venture satisfies the above definition. As a general rule, the distinguishing features of qualifying joint ventures as opposed to mere collaborative arrangements include economic integration of the parties’ business activities (as, for example, through a contribution of productive assets to a new  business undertaking), the elimination of competition between the parties in the joint venture’s field of activity through this contribution, and the relative permanence of the joint business activity

1.3 Definition of "control"

1.3.1 How are the concepts of "control" and "change of control" defined?

Control is defined as

beneficial ownership of more than 50% of the issued share capital of a company;

controls the majority of the votes at the general meeting of a company, or

the ability to appoint, or veto the appointment of, a majority of the directors of a company.

The ability to exercise ‘material influence’ is the lowest level of control that may give rise to a relevant merger situation. Under certain conditions minority shareholdings may have anticompetitive effects. The holder of the minority interest may have the ability to influence the target to compete less aggressively, or it may decide to behave less competitively not to affect its financial interest in the target company. Even with a purely passive financial interest the holder may have a unilateral incentive to compete less aggressively as it benefits through its minority interest if the target faces less competition.

The Nigerian Competition Commission considers that:

(i) The acquisition of shareholding or voting rights above 25% confers upon an acquirer a rebuttable presumption of the ability to materially influence policy;

(ii) In general, the acquisition of a minority shareholding below 15% will not lead to the Commission’s review unless in exceptional circumstances.

Control acquired as part of liquidation or insolvency proceedings falls outside the scope of control under the competition act.

1.4 Minority shareholdings

1.4.1 Are minority and other interests less than control caught by the merger control rules?

Yes, if the acquirer enjoys any of the rights listed in Section 1.3.1 above.

2. Establishing jurisdiction for notification of mergers

2.3 General thresholds

2.3.1 Threshold(s) for when a concentration must be notified under the general merger control regime?

Merger filing is needed if:

The first jurisdictional threshold:

  • The combined aggregate turnover of the undertakings concerned exceeded NGN 1,000,000,000 in Nigeria in the previous financial year; or

The second jurisdictional threshold:

  • The aggregate turnover of the target exceeded NGN 500,000,000 in Nigeria in the previous financial year.

2.3.2 For each threshold, can the threshold be triggered by only one undertaking having local turnover?

The first threshold can be triggered by any party having local turnover.

The second threshold can only be triggered if the target meets the turnover threshold.

2.3.3 For each threshold, can the threshold be triggered without any undertaking having local turnover?

None of the thresholds can be triggered without any party having local turnover.

2.3.4 Are there any circumstances where transactions falling below these thresholds may be still investigated?

The Nigerian Competition Commission has the powers to require that a transaction not meeting the jurisdictional thresholds be notified within 6 months of the implementation of the transaction.

2.4 Other national thresholds for ex ante merger control (e.g. sector-specific rules)

2.4.1 Relevant thresholds for sector-specific or other ex ante merger control rules?

There are sector specific rules for:

  • banks and financial institutions
  • Electricity suppliers
  • Insurance companies
  • Telecommunications industry
  • Oil and gas industry

2.4.2 Are any such schemes mandatory or voluntary?


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 meeting the above thresholds have to be notified to the Nigerian Competition Commission, regardless of whether the undertakings concerned are domiciled or have assets in Nigeria.

3. Calculation and allocation of turnover, asset value, transaction value etc.

3.4 Geographical allocation of turnover

3.4.1 The principles for the geographical allocation of turnover?

All turnover in, into or from Nigeria is applicable.

3.5 Valuation and allocation of assets

3.5.1 The principles for valuation and allocation of assets?

Not applicable.

3.6 Calculation of other thresholds

3.6.1 The principles for calculation of metrics for other thresholds (e.g. transaction value, market share, share of supply etc.)?

Not applicable.

3.8 Currency conversion

3.8.1 The exchange rate applied and applicable exchange rate date for conversion of the value of turnover and assets of undertakings in other jurisdictions?

The official rate of the Central Bank of Nigeria must be applied when converting turnover in foreign currency into NGN.

1. Practical information

1.2 Deadlines for filing

1.2.3 What are the sanctions for not filing a notifiable transaction?

Penalties for violation of the duty to notify is up to 10% of annual turnover.

Although not explicitly regulated under the competition act, it is expected that the Nigerian Competition Commission may order a prohibited combination to be rolled back.

This content was delivered
and last updated 25-01-2021 by

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