Notification and clearance timetable

Filing formalities

What are the deadlines for filing? Are there sanctions for not filing and are they applied in practice?

Transactions must be notified within 30 days of closing. The notification is merely informative in principle, and no clearance or approval would be a priori sought or granted. The sanction for failing to notify is a criminal penalty that ranges between 20,000 and 500,000 Egyptian pounds. In practice, the ECA actively seeks to enforce the provisions of article 19 and have brought many entities to admit breach and settle out of court against a fine that the ECA deems appropriate. The amount of settlement fine usually being considered negligible (ie, almost 1 per thousand of the minimum turnover threshold on average - based on ECA statistics published on the website: means that all of those accused in recent years have opted to settle out of court with the ECA. The alternative route would be litigious and involves being investigated by the Public Prosecutor and eventually referred to the criminal economic court, with all the associated reputational damage, cost and expense. Having said that, we note that the ECA have, through the Uber/Careem decision, requested that their merger must be approved before closing. The application will be reviewed by the ECA and a response would be given within 60 days from the date on which all supporting documents requested from the ECA are provided. The ECA emphasised in the above mentioned decision that its request to review and pre-approve the Uber/Careem merger is based on the fact that those two are the only actors in the relevant market and that their agreement to merge is a form of disguised collusion (penalised by a fine that does not exceed 500 million Egyptian pounds). The ECA based its decision on article 20(2) of the Competition Law, which allows the ECA to proactively anticipate and prevent all acts or transactions that the ECA reasonably suspects would have harmful effects on consumers and on the competition itself.

Which parties are responsible for filing and are filing fees required?

The acquirer of assets or shares and the merging entity of a merger process are required to make the notification. In case of joint management or joint venture, any of the parties to the transaction, especially those with an annual turnover exceeding 100 million Egyptian pounds are obliged to make the filing.

In the latter case, they may opt to undertake the process jointly or each on their own.

No filing fees are required, but lawyers’ services may be needed to follow up with the ECA and to make sure that the notification process has been duly completed to the satisfaction of the ECA after fulfilling all mandatory requirements and providing all requested information and documents. Partial or incomplete notification may not avert the risk of prosecution.

What are the waiting periods and does implementation of the transaction have to be suspended prior to clearance?

The notification obligation is post-closing and therefore there is no suspending effect on the transaction itself. However, if the ECA get their way, certain transactions would have to wait for 60 days before being cleared by the ECA. Practically speaking, the ECA have gone after one case so far, which is the case of Uber and Careem. The ECA decision provided the sole ground based on which Uber and Careem know they had to obtain a clearance from the ECA or face prosecution for illicit collusion.

Pre-clearance closing

What are the possible sanctions involved in closing or integrating the activities of the merging businesses before clearance and are they applied in practice?

Not applicable. When approvals of special regulators are required, such as the approval of the NTRA or the CBE, the parties attempting to execute the transaction before obtaining the mentioned approvals would be blocked at the share transfer level, which must be undertaken through the stock exchange even if the concerned target is not publicly listed. If in the unlikely scenario where a transaction takes place without due approval, the regulators always retain the right to cancel operational licences in case of unauthorised change of control (for banks, the threshold is 10 per cent - see question 1). In the Uber/Careem case, failing to notify and file for the ECA clearance prior to closing would expose the two undertakings to a criminal fine that can go up to 500 million Egyptian pounds to be doubled for ignoring the ECA decision requesting them explicitly to obtain the clearance.

Are sanctions applied in cases involving closing before clearance in foreign-to-foreign mergers?

The obligation to notify is a post-closing obligation. In the case where the notification is explicitly requested to be made before closing, penalties would apply irrespective of whether the transaction has a local component or merely foreign-to-foreign.

What solutions might be acceptable to permit closing before clearance in a foreign-to-foreign merger?

Not applicable a priori. But if the ECA request a pre-notification, there would be technically no solution but either to challenge the ECA decision in court or file for their approval. According to media sources, Uber and Careem may have decided to follow the latter route.

Public takeovers

Are there any special merger control rules applicable to public takeover bids?

Other than the requirements stipulated under the Capital Market Law, which are intended to guarantee transparency and equal opportunity for both bidders and sellers, the standard notification requirements apply as far as the ECA are concerned. The approval of the FRA before the launching of the tender offer is mandatory and no public takeover bid may be launched without the terms of takeovers and all necessary disclosure being approved by the FRA and published as part of the invitation to sell shares to the offering buyer.


What is the level of detail required in the preparation of a filing, and are there sanctions for supplying wrong or missing information?

According to article 44 of the Executive Regulations of the Law No. 3 for 2005, the notification must include the following information:

  • the name of the notifying party and their related parties, their respective nationalities, the addresses of their headquarters and their main places of business;
  • the details of the transaction along with its date and the legal position it creates;
  • the licences and approvals obtained from other regulators;
  • the annual turnover of the concerned entities; and
  • all supporting documents.

Failure to supply the required documents would be deemed as failure to meet the obligation to notify and is punishable by a fine not exceeding 500,000 Egyptian pounds. If false information is intentionally provided to the ECA, the fine can reach 1 million Egyptian pounds.

Investigation phases and timetable

What are the typical steps and different phases of the investigation?

If it comes to the knowledge of the ECA, either independently or through a third party’s complaint, or through its constant monitoring of the M&A market, that a transaction has occurred but not notified in accordance with the Competition Law or is contemplated in a manner to cause harm to consumers or competition, it would notify the concerned parties that they are being investigated for breach of article 19 of the Law, or in the latter case, issue a preventive decision forcing the parties to the contemplated transaction to file for the ECA approval prior to closing. The ECA would then initiate a criminal procedure against the infringing party and the file would be sent to the Public Prosecutor’s Office, which would confirm the infringement and would refer the matter to the competent court. In practice, all the accused so far have opted to settle the matter out of court with the ECA against payment of a fine to be determined by the latter.

What is the statutory timetable for clearance? Can it be speeded up?

There is no time limit in the law itself, but the notification process typically takes up to one week between the date the notification is filed and the date on which the ECA confirms receipt of said notification, if no further documents or information are required.