On 13 March 2013, the COMESA Competition Commission (CCC) published its first merger notice since commencing operations in mid-January 2013.
The notice provides a summary of the formal application for merger approval submitted to the CCC on 5 March 2013, in respect of a proposed merger between Koninklijke Philips Electronics N.V. and Funai Electric Company Limited – the first application of its kind to the CCC.
Philips is a Dutch firm which operates three major divisions (Consumer Lifestyle, Healthcare and Lighting) in over 60 countries. According to the notice, Philips will dispose of its Lifestyle Entertainment business to Funai, a global manufacturer and distributor of electronic equipment for DVD and Blu-ray disc products and LCD televisions.
Philips’ Lifestyle Entertainment business is housed within its Consumer Lifestyle Division and is responsible for the design, manufacture and retail of consumer electronic products and accessories, including audio-visual multimedia products and home communication products.
Aside from announcing the first ever formal merger notification to the CCC, the notice signals what is widely expected to be a test case on how the authority is likely to deal with merger filings in practice. The practical application of COMESA merger filings has been dogged with concerns of uncertainty and potential legislative oversight, not least of which include concerns relating to high merger filing fees, lack of clear prior implementation provisions and uncertainty regarding the time allowed for the assessment of transactions.
In a recent address by the Commissioner of the CCC, indications were that ‘guidelines’ aimed at clarifying these various issues were in the process of being prepared which would be published on the CCC’s website for comment by stakeholders.
These guidelines will be a welcome indication of just how receptive the CCC has been to the various comments and criticism already received by it and hopefully will provide much needed clarity on the CCC’s likely approach to future merger filings. With approximately two further transactions at pre-notification stage, the CCC is gradually establishing itself as a regional competition authority required to be taken seriously.
As the authority’s activities continue to gain traction, it is becoming increasingly important that firms operating within COMESA member states continue to stay abreast of the regions competition laws and their impact on business operations.