Merger Control Developments | Rwanda | Africa Competition Guide

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

Local counsel are not aware of any notified transactions that have been prohibited by RICA.

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

Currently, there are no merger filing fees payable in Rwanda and local counsel are not aware of any proposals in this regard.

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 merger regime in Rwanda is suspensory and mandatory. According to the Rwandan Competition Act, any merger that is not notified or notified in manner contrary to the law shall be legally null and void and rights or obligations arising from any agreement pertaining to such merger shall not be enforceable.

In addition, RICA may impose administrative sanctions if the parties to a merger fail to give notice of such a merger as required by the law which may include an administrative fine of 5% to 10% of the enterprise’s annual turnover of the preceding fiscal year in which the violation has occurred.

RICA is also vested with powers to order a party to the merger to sell any shares, interest or other assets it has acquired pursuant to a merger that is not notified.

Local counsel are not aware of instances where RICA has brought cases against entities accused of gun-jumping and/or prior implementation of a notifiable transaction. This information is not publicly available.

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.

No. As indicated in our response above, the competition regime in Rwanda is suspensory and mandatory parties are thus prohibited from implementing a notifiable transaction until RICA grants its approval.

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

Local counsel are not aware of any cases in which RICA fined any entity for failing to comply with merger conditions as this information is not publicly available. There is no jurisprudence on the point and as far as local counsel are aware it has not been tested with RICA.

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.

Local counsel are not aware of any such cases as this information is not publicly available. There being no jurisprudence on the point and as far as local counsel are aware it has not been tested with RICA.

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?

In considering whether a transaction has a nexus to Rwanda where the parties do not have a presence in Rwanda, such as through a subsidiary, RICA would consider if the parties to the transaction derived any turnover or held any assets in Rwanda. Local counsel are not aware of any specific transaction falling within this category that has been published by RICA. There is no jurisprudence on the point, and as far as local counsel are aware, it has not been tested with RICA.

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

None that local counsel are aware of.

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.

RICA does not consider internal restructurings that do not involve a change in ultimate control to be notifiable transactions. The Rwandan Competition Act defines a merger as the direct or indirect acquisition or establishment of a controlling interest in the whole or part of the business of a competitor, supplier or any other person. Internal Restructurings do not, therefore, meet this definition.

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.

No obligation to notify would be triggered by the mere interposition of a new entity where there is no change in the ultimate control of the target entity.

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.

Based on publicly available information, there has yet to be a merger to be approved subject to public interest grounds.

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

As mentioned above, local counsel are not aware of any merger transaction that has been prohibited by RICA.

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.

RICA has not currently published any specific rules or guidelines on joint ventures. Therefore, these transactions would be notifiable, provided that they meet the definition of a merger as set out under the Rwandan Competition Act.

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.

There is no jurisprudence on the point, and as far as local counsel are aware, the position has not been tested with RICA.

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

RICA has an initial period of 30 days after parties submit the merger notification, to examine the merger and make a determination. This 30-day time period may be extended for a period not exceeding 15 working days, in which case, RICA is required to issue an extension certificate to the parties.

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.

RICA has the right to “stop the clock” from running where it has requested for further information from a merger party in the course of analysing a filing. In certain instances, RICA has indicated that the review of the merger has stopped running until the parties provide the additional information requested, particularly where significant or vital information is outstanding from a merger party.

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.

Legally, an acquirer can have in place, a hold separate arrangement in respect of the Rwandan aspect of a transaction where approval from RICA is not obtained by a specific date, on the condition that the change of control in Rwanda, will not take place in the absence of RICA approval. However, from publicly available information, local counsel are not aware of any such arrangement having been implemented in practice. There being no jurisprudence on the point, and as far as local counsel are aware, the position has not been tested with RICA.

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.

Legally, a transaction having a Rwandan aspect may be closed sequentially provided that the closing related to the aspect of the transaction triggering a filing in Rwanda takes place after RICA approval has been obtained. It is unlikely that RICA would be concerned with a closing in another jurisdiction, which does not result in a change of control in Rwanda. There is no jurisprudence on the point, and as far as local counsel are aware and the position has not been tested with RICA.

Africa Competition Guide

Rwanda

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