There’s still hope that changes to competition rules could pass the House this month
Talks over amendments to the Competition Act aren’t dead yet: The House Economic Affairs Committee continued to debate the contentious amendments to the Competition Act yesterday in hopes that an agreement could be found before MPs break for summer recess, committee head Ahmed Samir told reporters yesterday. "The committee is keen that the debate over the amendments is finished very soon in order for it to be discussed and voted on by the House before it adjourns for summer recess,” he said.
Serious disagreements remain over how much power to give to the ECA: Officials from the Central Bank of Egypt (CBE), the Financial Regulatory Authority (FRA) and the EGX have been unable to agree with the Egyptian Competition Authority (ECA) on key parts of the proposed changes, which would hand the authority greater powers to regulate mergers and acquisitions. There remain disagreements over how much time the ECA would have to assess M&As and the fees it would charge companies for investigations.
The current draft would allow the authority 30 days to investigate transactions, a period that EGX chief Mohamed Farid wants to cut in half to minimize the “negative impact.” Some MPs want to prevent the ECA from having a say over smaller M&As, arguing that the proposed EGP 900 mn threshold is too low and that the authority should only deliberate over larger transactions.
There may only be a few days left before parliament breaks for the summer: Some MPs expect the House to break for the summer recess as soon as Tuesday. Failing to reach an agreement during the current legislative session would mean that the amendments wouldn’t be discussed in the general assembly until our elected representatives return from the break in October.
Background: The amendments, which have been up in the air since last year, would give the ECA the power to approve or block mergers and acquisitions before they are concluded if the regulator feels the transaction would be anti-competitive. As it stands today, the ECA can only raise red flags, typically after a sale is concluded (though that hasn’t stopped the authority in recent years from making its position clear when it objects to certain acquisitions).
Want more on the proposed changes to competition rules? We have an explainer here.
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One MP wants answers on British American Tobacco’s decision to exit Egypt: MP Mahmoud Essam has asked Prime Minister Moustafa Madbouly to explain whether British American Tobacco’s (BAT) decision to discontinue operations in Egypt is related to the new tobacco manufacturing license given to Philip Morris earlier this year. BAT said last week that it would be leaving Egypt after 22 years due to concerns about the market’s long-term commercial viability, and denied that the license factored into its decision. BAT was reportedly one of the companies to object to the tender last year, arguing that the conditions would establish a new monopoly over the manufacture of e-cigarettes and heated tobacco products.