Merger Control Developments | Gabon | Africa Competition Guide

Have any notified transactions been prohibited by the competition authority in your jurisdiction since January 2021? If so, on what basis?

According to local counsel’s exchanges with the DGCC, the notified transactions have not been prohibited by the Competition Authority since January 2021.

Are there official proposals to amend merger filing fees and/or monetary thresholds or have such amendments been affected?

According to local counsel’s discussions with the DGCC, there are no proposals to change merger filing fees or monetary thresholds.

Is the submission of a merger notification suspensory and mandatory in your jurisdiction? If so, has the authority brought any cases against entities accused of gun-jumping and/or prior implementation of a notifiable transaction? If so, kindly provide details.

Yes. The submission of a merger notification is suspensive and mandatory in Gabon. In accordance with the provisions of Article 62 of the CEMAC Competition Regulation, all merger operations are subject to prior control and can only be carried out after the decision of the Competition Authority.

In addition, apart from the foreign direct investment review regime defined above, there is also a regime for the control of economic concentration/merger operations. In accordance with the provisions of Article 57 of the CEMAC Competition Regulation, notification formalities for merger control purposes are compulsory, regardless of the activity and location of the head office of the companies concerned, provided that they are likely to have a substantial impact on competition in the CEMAC market. Consequently, this review regime applies to foreign buyers.

In the context of the implementation of merger control, the notification is sent to the Community authority, including the CEMAC Commission, when the companies involved in the transaction have a combined turnover in the Common Market of more than CFAF 10 billion excluding tax (approx. USD 16,458,780), or when they together hold more than 30% of the market, or when the transaction involves at least two Member States in accordance with Articles 59 et seq. of the CEMAC Competition Regulation; and below the said thresholds, the notification is addressed to the national authority, which is the Ministry of the Economy/DGCC, in accordance with the provisions of Articles 33 et seq. of the Law Establishing the Competition Regime.

In accordance with Article 58(1) of the CEMAC Competition Regulation, notification is mandatory in the following cases: • when two or more previously independent undertakings merge;
when one or more undertakings, whether by capital participation, contract or any other means, directly or indirectly acquire control of the whole or parts of one or more other undertakings; or
when a joint venture is created, which constitutes an autonomous entity on a lasting basis.

Moreover, Article 33 of the Law Establishing the Competition Regime specifies that any proposed economic concentration or any concentration likely to affect competition, in particular by creating or strengthening a dominant position, must be submitted to the Competition Authority for an opinion when the enterprises that are parties to the act, that are the subject of it or that are economically linked to them, have together carried out more than 25% of the sales, purchases or other transactions on a national market of substitutable products or services or on a substantial part of such a market.

Concerning the section on prosecution for failure to notify in advance, it should be noted that, according to local counsel’s exchanges with the DGCC, no entity has been investigated or sanctioned for skimming off the top and/or implementing a notifiable transaction in advance.

Consequently, no prosecution procedure has been initiated by the Competition Authority.

Is the submission of a merger notification non-suspensory and voluntary in your jurisdiction? If so, has the authority brought any cases against entities for failure to notify a transaction post-completion within the stipulated time period? If so, kindly provide details, including details of instances where the authority has specifically requested notification of mergers.

Not applicable. See the answer to the previous question.

Please describe any cases in which the competition authority fined any entity for failing to comply with merger conditions.

Based on local counsel’s exchanges with the DGCC, there have been no cases at national or even Community level where the Competition Authority has fined an entity for non-compliance with the merger conditions.

Please describe any cases in which the acquisition of shares or assets of another firm was interdicted by the competition authorities in your jurisdiction, as well as the basis for this.

Based on local counsel’s exchanges with the DGCC, there have not yet been any cases of prohibition of acquisition of shares or assets of another company by the competition authorities in Gabon.

Please describe any cases in which parties (acquirer and target) did not have physical presence in your jurisdiction and the transaction was nonetheless notified. For example, where either party makes sales and derive some turnover in your jurisdiction do not have any subsidiaries or assets in the country, what is the local nexus test /local effects test to establish merger review jurisdiction?

Based on local counsel’s exchanges with the DGCC, there have not yet been any cases of notification of transactions in which the parties (acquirer and target) do not have a physical presence in Gabon.

The current regulation does not expressly provide for this situation. However, on the basis of the principles mentioned above, concerning the cases where notification is mandatory, we estimate that if the target and acquiring entities operate in the CEMAC zone, through subsidiaries located in at least two Member States, the transaction should be subject to mandatory notification. The same would apply if the transaction is considered likely to have a significant impact on the national or Community market.

Has the authority approved any mergers subject to novel or otherwise noteworthy conditions?

Based on local counsel’s discussions with the DGCC, the Competition Authority has not approved any mergers subject to new or relevant conditions.

However, it should be noted that the Competition Authority can approve mergers under new or interesting conditions in accordance with the provisions of Article 37 paragraph 2 of the Law Establishing the Competition Regime. This Article specifies that the Minister in charge of the Economy may, on his own authority, or with the Minister of the economic sector concerned, after consulting the DGCC, enjoin the companies, by a reasoned decree with a deadline, to make the completion of the operation subject to the observance of requirements likely to contribute to economic and social progress to a sufficient extent to compensate for the harm to competition.

Please indicate whether the competition authority has required notification of internal restructurings (that do not involve a change in ultimate control) and, if so, on what basis.

According to local counsel’s exchanges with the DGCC, there have been no cases where the Competition Authority has required notification of intra-group restructurings (which do not involve a change of ultimate control).

Note that under Article 32 of the Competition Act, local counsel understand that the notification requirement does not apply in the case of intra-group restructuring operations.

Please indicate whether an obligation to notify could be triggered as a result of a change in direct control over an entity through the interposition of a new entity within the group, albeit that the restructure does not result in a change in ultimate control.

As indicated above, changes of control that may occur within the same group do not constitute economic concentrations within the meaning of the regulations in force.

In accordance with the regulations in force, local counsel understand that this restructuring must not result in the creation of a joint venture constituting an autonomous entity on a lasting basis, nor in the exercise of a decisive influence over one or more other undertakings (outside the group) or in the creation or strengthening of a dominant position and which appreciably affects competition in the CEMAC market, or in a part of it, as detailed below.

Please describe cases of mergers that have been approved subject to public interest grounds since January 2021 and kindly describe the nature of these public interest grounds.

According to local counsel’s exchanges with the DGCC, no merger has yet been approved on public interest grounds in Gabon, not since January 2021, nor recently.

However, it should be noted that the Competition Authority can invoke public interest grounds to allow a transaction to take place that may undermine competition law.

In accordance with Article 68 of the CEMAC Competition Regulation, when it appears that a concentration substantially affects competition in the common market or a significant part of it, the CEMAC authority shall, before taking a decision, assess:

whether the operation makes a sufficient contribution to technological progress or brings about a competitive gain to offset the harm to competition; and
whether the operation can be justified on grounds of public interest such as to outweigh the harm to competition. This is the case for the preservation of competition in a sector of activity or in a geographical area of the Union, the need to safeguard employment or the strengthening of the international competitiveness of Union undertakings.

Please describe cases where the competition authority has prohibited a merger transaction based on public interest grounds alone.

According to local counsel’s discussions with the DGCC, the Competition Authority has not yet prohibited a merger on the sole basis of public interest grounds.

Describe the circumstances in which ‘greenfield’ / joint ventures mergers are caught under the merger review regime, and kindly provide instances of such mergers that have been notified to and considered by the competition authority.

In accordance with Article 62 of the CEMAC Competition Regulation and Article 33 of the Law on Competition, the economic concentration control regime applies in the following cases:

when the undertakings involved in the operation together achieve a turnover of more than ten billion CFA francs (excluding tax) on the CEMAC market and together hold more than 30% of the market;
when two or more previously independent companies merge;
when one or more undertakings directly or indirectly acquire, whether by capital participation, contract or any other means, control of the whole or parts of one or more other undertakings;
where a joint venture is created which constitutes an autonomous entity on a lasting basis;
where the transaction is likely to affect competition, in particular by creating or strengthening a dominant position;
where the undertakings which are parties to the act, the subject of the act or economically linked to them, together, account for more than 25% of sales, purchases or other transactions on a national market for substitutable products or services or on a substantial part of such a market.

In view of the above, local counsel understand that mergers and joint ventures are subject to mandatory notification for merger control review under the applicable regulations when one of the criteria listed above is applicable.

However, according to local counsel’s exchanges with the DGCC, it appears that there have been no notifications of this type in Gabon.

Please indicate whether there are any circumstances in which non-controlling minority share acquisitions that have been found to constitute a notifiable merger and the basis for this.

In accordance with local counsel’s exchanges with the DGCC, and in the light of the legislation in force, an acquisition of minority shares without control may be considered as constituting a merger subject to a prior notification requirement, in particular:

when the undertakings which are parties to the transaction, which are the subject of the transaction or which are economically linked to them, have together achieved more than 25% of the sales, purchases or other transactions on a national market for substitutable products or services or on a substantial part of such a market; or

where the undertakings involved in the transaction have a combined turnover on the CEMAC market of more than CFAF 10 billion (excluding tax) (approx. USD 16,458,780), they have a combined market share of more than 30%.

Consequently, even in the case of the acquisition of minority shares, the operation must be notified in advance to the Competition Authority when one of the criteria listed above is met.

On average how long does the authority in your jurisdiction take to approve a non-complex transaction? What about a complex one?

For non-complex transactions:

The national Competition Authority has three months from the date of notification to give its opinion; and
The CEMAC authority has six months to give its decision.

For complex transactions:

The national Competition Authority has six months from the date of notification to give its opinion (where the Minister in charge of the economy refers the case to the Competition Authority in the context of the examination of a notification); and

The CEMAC authority has seven months to render its decision (where the parties to a merger undertake to take measures to remedy, where appropriate, the anticompetitive effects of the merger).

It should be noted that, in practice, it is difficult to estimate the actual average duration of the procedures as, on the one hand, the law does not provide for an emergency procedure in this respect and, on the other hand, the Competition Authority generally examines notifications in the light of the legal deadlines given to it to give its decision.

Kindly indicate whether the competition authority enjoys the power to “stop the clock” for the review of a merger and under what circumstances can this happen. If so, please describe cases where the authority has stopped the clock.

The regulations in force do not provide for this procedure. The Competition Authority is obliged to decide within the legal time limits indicated above. Therefore, local counsel are of the opinion that neither the national nor the CEMAC authorities have the power to stop the clock for the examination of a merger.

Please indicate whether, legally or in practice, your competition authority allows for “Carve out” / “hold separate” arrangements (this means that where clearance is not obtained in your jurisdiction by a specific date, the acquirer would opt not to take over the company in your jurisdiction but will implement the transaction in countries where approval has been obtained. The target in your jurisdiction may be left behind with the sellers for future disposal separately). If so, kindly describe cases where this has happened.

The regulations in force do not expressly provide for this procedure. On the other hand, in accordance with Article 37 of the Law on the Competition Regime, the Minister in charge of the economy may, on his own authority, or with the Minister responsible for the economic sector concerned, after consulting the Competition Commission, enjoin undertakings, by means of a reasoned decree with a time limit, to:

either not proceed with the proposed concentration and restore the previous legal situation;
either modify or complete the operation and take any measure likely to ensure sufficient competition; or
make the implementation of the operation subject to the observance of requirements likely to contribute to economic and social progress to a degree sufficient to offset the harm to competition.

Article 71 of the CEMAC Competition Regulation also provides that the parties to a merger may undertake to take measures to remedy the anticompetitive effects of the transaction, if any, either at the time of notification or at any time before the authority has taken a decision.

The various options presented above have the effect of increasing the time required to process the notification as presented above.

Please indicate whether, legally or in practice, your competition authority allows for a transaction to close sequentially (for example: the shares in a target company, which triggers a filing requirement in your jurisdiction or which is active in your jurisdiction, will only be transferred after clearance in your jurisdiction has been obtained, while the shares in other companies affiliated to the target and operating in other countries thus do not trigger a filing requirement in your jurisdiction, shall be transferred as soon as clearances in those other relevant jurisdictions have been obtained (irrespectively of whether clearance in your jurisdiction has been obtained). If so, kindly describe cases where this has happened.

The regulations in force do not expressly provide for this procedure. According to local counsel’s discussions with the DGCC, the above observations also apply to mergers involving a sequential closing scheme.

Africa Competition Guide

Gabon

Select a Topic