South Africa does not yet have an overarching foreign investment review regime.
Having said that, the Competition Amendment Act introduced a foreign investment review regime, in terms of which, acquisitions by foreign entities involving assets or businesses operating in sectors that are designated as “strategically important to South Africa’s national security interests”, will need to undergo a foreign investment review approval process. This process will be independent of any merger approval process that may or may not be required.
A committee will be established and charged with considering whether mergers involving a foreign acquiring firm have an adverse effect on national security interests. The President has yet to publish a list of national security interests and provide guidance on the notification process, procedure, and timeframes to be followed. Currently, these provisions have yet to become operative and it remains uncertain as to when the regime will come into effect.
In addition to the above, there are certain strategic industries, such as banking, insurance, mining and telecommunications, which are subject to sectoral regulation in terms of which certain transactions involving foreign acquiring firms may need to be notified to regulators.