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Tuesday, 19 October 2021

ECA poking into M&As again

The Egyptian Competition Authority (ECA) is not happy that a number of mergers and acquisitions that have taken place without it being notified. In a statement yesterday, the competition watchdog warned businesses making EGP 100 mn in annual revenues that they must inform the ECA of M&A activity within 30 days of the transaction closing. Failing to do so could see them run afoul of the ECA Act, it said. The statement did not name the companies alleged to be in violation.

Al Borsa cites unnamed sources as adding that the ECA has found at least 10 instances of M&A that went through without the agency being informed, adding that the transactions include some in the automotive and steel industry. We can’t recall any recent transactions in either industry large enough to trigger the ECA’s interest.

What power does the ECA have to do this? The ECA Act of 2005 grants the authority the power to raise red flags about mergers and acquisitions that could be anti-competitive, but only after a transaction is concluded. Successive antitrust bosses have sought the power to approve or reject M&As before they go through. Amendments to the act have been recently introduced, but are still making their way through the House of Representatives, with the House Economics Committee having given its preliminary approval to the amendments earlier this year.

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