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Wednesday, 3 October 2018

El Sisi met Uber CEO Khosrowshahi as competition watchdog’s warning against potential Careem merger loom

** #3 El Sisi met Uber CEO Khosrowshahi: Uber CEO Dara Khosrowshahi discussed the company’s operations in Egypt and investment plans going forward with President Abdel Fattah El Sisi last week on the sidelines of the 73rd UN General Assembly in New York, the company said in a statement (pdf) on Tuesday. Khosrowshahi reiterated plans to expand across 50% of Egypt’s governorates by year’s-end.

ECA objections to Uber, Careem mergers hangs in the air: The meeting came as Uber and its local rival Careem are being scrutinized by the Egyptian Competition Authority over alleged talks of a USD 2-2.5 bn merger between the two. While Uber and Careem initially denied the reports, the ECA issued a sharp warning against any merger. The watchdog had asked the two companies to seek clearance before signing any agreements, citing a similar case in Singapore where the US company and its Asian rival Grab were last week fined a combined USD 9.5 mn.

Landmark case for the ECA: The potential merger is increasingly being seen as a watershed case for the watchdog to increase its powers over the M&A landscape. Law firm Baker McKenzie’s Cairo office says the ECA’s flexing of muscles is a sign of the ECA’s newfound desire to regulate M&A, warning that “the development appears to signify a new enforcement policy of the ECA, under which parties to any merger or acquisition may be required to notify the transaction to the ECA and to obtain its prior approval before entering into the agreement,” the firm. As we have previously reported, the ECA wants to amend the Antitrust Act to require its approval over M&A transactions larger than EGP 100 mn.

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