Egyptian Competition Authority ("ECA") is pursuing a more active role in merger control, which could have implications for multinational businesses contemplating transactions with a competitive effect in Egypt. Although currently post-merger notification is required for certain transactions, compliance with and enforcement of this process have been inconsistent since the launch of Egypt's merger control regime more than ten years ago. Recent enforcement trends, however, including against foreign-to-foreign transactions, indicate that the ECA's new leadership may be planning to change that.
Under the current Competition Law, post-merger notification is required within 30 days of closing for transactions that involve combined turnover in Egypt of over 100 million Egyptian Pounds (US$5.5 million).1 Last year, the ECA proposed draft legislation to introduce a premerger notification requirement (see Egypt Considers Premerger Notification) but the draft has been on hold for months. The ECA is now expected to revive discussions of that draft and push for its proposal to parliament, potentially as early as this fall. The ECA also introduced an updated merger notification form that requires companies to submit their notification materials and information to the ECA electronically, effective September 1, 2018.2
In the meantime, the ECA is not waiting for the new premerger regime and is actively pursuing mergers with competitive effects in Egypt using its current powers. The ECA does not have jurisdiction to block transactions, but it can monitor transactions affecting the Egyptian economy and subject violators to potential criminal fines. Recently, the ECA has been increasingly using such tools to boost enforcement and advance compliance with the Competition Law. For example, the ECA investigated several companies for failing to timely notify the ECA of transactions that met the thresholds and referred at least three of them to criminal prosecution – the companies ultimately settled the pending criminal charges.
The ECA's recent inquiries into a rumored merger between Uber and Careem is another demonstration of the agency's changing approach. Press reports indicated that Uber was in talks over a potential transaction with Careem, the leading ride-sharing service in 70 cities across the Middle East and North Africa and based in the UAE.3 Both companies are key players in the Egyptian market, but neither is based there.
Although no deal has been signed yet, the ECA nonetheless decided that it has jurisdiction to investigate the proposed merger prior to its conclusion because it would effectively amount to an anticompetitive agreement between horizontal competitors.4 The ECA concluded that an Uber-Careem transaction "will likely lead to serious and irreparable harm to competition and consumers" in Egypt.5 In addition, the ECA indicated that it "shared its concerns with the COMESA Competition Commission", and that the transaction may affect competition in other member states too.6
Therefore, parties considering mergers or acquisitions that may have anticompetitive effects in Egypt should consider engaging with the ECA to ensure compliance with this jurisdiction's merger control regime. The ECA's heightened enforcement efforts, and its coordination with international competition bodies suggest that the agency will likely expect stricter compliance with its merger control requirements as it prepares to transition towards mandatory premerger notifications.