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Thursday, 13 February 2020

The Egyptian Competition Authority’s bid to block Cleopatra-Alameda merger highlights its lack of effective oversight powers -ECES

M&A WATCH- Competition watchdog’s bid to block Cleopatra-Alameda merger highlights its lack of effective oversight powers: The Egyptian Competition Authority (ECA) lacks the legal tools it would need to effectively act as an anti-monopoly and fair competition regulator, the Egyptian Center for Economic Studies (ECES) said. This gap in the ECA’s powers is evident in its bid to block a possible merger between healthcare providers Cleopatra and Alameda, which reportedly saw the authority resort to the Health Ministry to intervene on its behalf. According to ECES, this move serves as a reminder that the ECA doesn’t have the legal mandate to really stop M&As from happening, and currently has to either get a sovereign entity (in this case, the Health Ministry) to do its bidding, or impose fines after the fact.

Enter Competition Act amendments: The ECA has been looking to push through amendments to the Competition Act that would grant it sweeping new powers, including sign-off powers on M&As worth more than EGP 100 mn. As it currently stands, Article 19 of the law requires mergers and acquisitions of a certain size be notified to the ECA within 30 days from the date on which the transaction comes to effect, meaning the authority is effectively toothless in the face of M&As it doesn’t like.

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