Firms carrying out cross-border mergers and acquisitions within the East African Community (EAC) bloc with a value of at least Sh4.5 billion ($35 million) will now require approval by the East African Community Competition Authority (EACCA) under new rules that take effect on November 1, 2025.
The mandatory notification will apply to transactions in which the merging entities intend to carry out business in at least two of the eight EAC member states, but an exemption will be granted when each of the parties has at least two-thirds of its aggregate turnover or assets within the same EAC partner State.
The merging companies will pay the agency a notification fee of Sh5.8 million ($45,000) for transactions valued at between $35 million and $50 million (Sh6.5 billion), while those valued at $50 million to $100 million (Sh12.9 billion) will be charged a fee of $70,000 (Sh7 million).
Deals of a value above Sh12.9 billion will attract a notification fee of $100,000 (Sh12.9 million).
“Our understanding from the EACCA is that the target undertaking must be present in at least one EAC Partner State, either through assets in the region or sales into the region, before the EACCA can assert jurisdiction,” analysts at law firm, Bowmans, said in a commentary on the new rules.
“Transactions pending before a national competition authority or concluded before November 1, 2025, will be exempt from the new regime.”
Implementation of mergers or acquisitions that meet the EACCA notification without the agency’s approval will attract a penalty of up to 10 percent of the undertaking’s annual turnover within the EAC for the preceding financial year.
The regional competition body was formed under the East African Community Competition Act, 2006, which came into effect in 2014. It is mandated to implement and enforce cross-border competition law and policy within the bloc.
This includes reviewing, approving or rejecting cross-border mergers that have the potential for an anticompetitive effect.
However, the supporting regulations authorising the EACCA to receive merger notifications and those setting out the fee structure were only approved this year.
The new rules are also coming into effect in a bloc whose member states are at different stages of enforcing their own in-house competition rules.
Analysis by Bowmans showed that Kenya and Tanzania actively enforce competition laws, while competition legislation and a regulator are in place in the Democratic Republic of Congo, Burundi, and Rwanda.
In Uganda, a Competition Act was put in place last year, enforced by a technical committee within the country’s Ministry of Trade. A Completion Bill is in place in South Sudan, while Somalia is developing its competition legislation.
EACCA and the Common Market for Eastern and Southern Africa (Comesa) have also signed a non-binding memorandum of understanding for information sharing and coordination of merger investigations to avoid dual notification of deals in the six EAC countries that are also members of the pan African trade bloc.
