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Introduction of Pre-Merger Clearance Regime: Antitrust Update
The Egyptian Competition Authority (the “ECA”), in cooperation with the Association of Corporate Counsel and the German University in Cairo organized a workshop to share insights on the current antitrust notification regime in Egypt as well as the expected amendments to the same.

The workshop was led by Dr. Mahmoud Momtaz, Chairman of the ECA, alongside Ms. Reham Naeem, the Country Head of Legal at Novartis and Mr. Mohamed El-Baroudy, legal researcher at the ECA.

The key discussions held at the workshop revolved around the framework for the proposed pre-merger clearance regime (the “Pre-Merger Regime”). We had already reported on this draft legislation and have been following the same very closely.

The Proposed Pre-Merger Notification

The crucial topic discussed at the workshop was the much-anticipated Pre-Merger Regime. The current post-merger notification is triggered for mergers, acquisitions and joint venture establishments where the parties to a transaction generate a combined turnover exceeding EGP 100 million in Egypt.

During the workshop, the ECA outlined the proposed Pre-Merger Regime, which is currently being discussed in the Parliament’s Economic Committee. The proposed Pre-Merger Regime will consist of the following two controls:

  1. A turnover threshold to be set at a combined amount of EGP 900 million in Egypt. In this regard, the ECA have further indicated that a second aspect of the turnover threshold will be added, which requires each party to the transaction to have individually generated a minimum of EGP 250,000 in Egypt for the Pre-Merger Regime to be triggered.

  2. The second control is that there must exist a local nexus to Egypt through the merger, acquisition or establishment of the joint venture. Other than a local nexus established by virtue of the turnover generated by the parties, the ECA did not provide any further input on how said nexus will be established.


The Pre-Merger Regime is expected to apply to mergers, acquisitions, and the establishment of joint ventures. This will be limited solely to brownfield projects. As currently implemented under the post-merger notification regime, the Pre-Merger Regime will further not apply to group restructuring transactions unless the same entails a direct or indirect change of control or ownership.

With regards to the timeframes, the ECA has indicated that the currently proposed timeline for issuing a clearance decision is 30 days following submission of the pre-clearance application, provided all required documentation and information has been submitted thereto. Said timeframe may be extended by an additional period of up to 60 days should the ECA find that the transaction raises particular concerns or challenges.

To avoid said extensions, the ECA has advised that parties submitting their transactions for pre-clearance provide as much detail as possible that cover any potential competition-related concerns that may arise from the contemplated transaction. In doing so, the likelihood of the ECA reverting with follow-up requests and queries on the same is minimized and the parties are more likely to receive a clearance decision within the 30-day window.

In addition to the above, the ECA also indicated that in applying the Pre-Merger Regime, the ECA would highly likely be open and further encourage the relevant parties to any contemplated transaction to approach and engage in pre-discussions with the ECA in order to determine whether said contemplated transaction triggers pre-clearance concerns to be solved even before filing.

As a final point on the Pre-Merger Regime, the ECA reiterated that the timeframe for the implementation of the proposed regime is unknown as the corresponding amendments are still subject to discussions by the Parliament.

It is important to highlight that the abovementioned information on the Pre-Merger Regime is for guidance purposes only and may still be subject to amendments by the Parliament during its discussions.

Additionally, the transition period expected to be applied remains at the discretion of the Parliament to decide. That being said, the ECA has indicated their willingness to implement the Pre-Merger Regime with leniency for a given period upon its enactment.

Clarifications on Previous Pre-Mergers

Another important topic covered by the ECA during the workshop was its explanation of its precedents in intervening with certain transactions prior to closing. In this regard, the ECA has clarified that its intervention in the same has been due to requests provided by other competent regulators for the ECA to assess the antitrust considerations of certain transactions. As such, the ECA has solely been mandated, as part of other regulatory approvals, to intervene therein.

During the workshop, the ECA further clarified that it received approximately 70 of the abovementioned requests to pre-clear transactions during 2021. In assessing the same, the ECA has only exceeded the 30-day response period in 2 to 3 cases at most and has therefore proven their responsiveness towards pre-clearing transactions.
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