During December 2022, the Egyptian Parliament issued a long-awaited amendment introducing the first pre-merger control regime in Egypt. The approved amendments are to be promulgated by the President in the form of a law and to be published in the Official Gazette. The new regime is introduced as part of the economic reform strategy adopted by the Egyptian government in light of the global and national economic challenges.
The new amendments introduce a mandatory suspensory regime under which parties that meet certain turnover or value of assets thresholds are required to notify the Egyptian Competition Authority ("ECA") before closing their transaction.
There are two main thresholds for the assessment, which are as follows:
If the combined turnover of the parties in Egypt exceeds EGP 900 million (approximately USD 37 million) and the turnover of each of at least two persons (i.e., companies or parties) exceeds EGP 200 million (approximately USD 8.2 million)
If the global combined turnover of the parties exceeds EGP 7.5 billion (approximately EUR 305 million) and one of the parties to the transaction has turnover in Egypt that exceeds EGP 200 million (approximately USD 8.2 million)
Upon submission of a complete and correct notification, the ECA has 30 working days to review the transaction as part of phase 1. This can be extended once for 15 working days if the parties submit remedies. The ECA may decide to push the notification to phase 2 where it will have 60 working days for assessment and may be extended once for 15 working days if the parties submit remedies.
Therefore, if the ECA does not issue the decision within the prescribed time frame, the notification will be deemed to have been accepted unconditionally.
The amendments do not entitle the ECA the right to "stop the clock" if the parties delay the submission of any additional requests. However, the Executive Regulations have not been adopted so far. It might be the case that the ECA will include a mechanism to empower it to stop the clock and ensure that the parties are not capable of delaying the process to force the ECA into an unconditional approval.
Various stakeholders fear that these new amendments will stifle investment and create an additional layer of bureaucracy. However, we understand that the amendments were inspired by the best international practices. It is yet to be seen how the new law and its Executive Regulations will be applied and enforced in practice. This will be a key factor to establish whether the new regime will achieve the desired objectives while maintaining an attractive investment environment.
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