INTRODUCTION

The recent public warning issued by the Federal Competition and Consumer Protection Commission (FCCPC) is a reminder that merger notification in Nigeria is not a mere procedural formality, but a substantive legal obligation under the Federal Competition and Consumer Protection Act 2018 (FCCPA). The Commission expressly warned firms, legal advisers, transaction parties and other stakeholders that qualifying mergers and acquisitions must be notified to the FCCPC and cleared before implementation. Merger control must therefore be treated as a central component of legal due diligence and transaction planning.

The legal foundation of merger control in Nigeria is principally contained in Part XII of the FCCPA, particularly sections 92 to 102. Section 92 adopts a broad definition of merger, capturing any transaction through which one or more undertakings directly or indirectly acquire control over the whole or part of the business of another undertaking. This functional conception of control ensures that the regime is not limited to straightforward share acquisitions, but extends to asset acquisitions, amalgamations, and joint venture arrangements where control is acquired or established. A similar approach has been adopted in other jurisdictions. In South Africa, the Supreme Court of Appeal in Distillers Corporation (SA) Ltd v Bulmer (SA) (Pty) Ltd confirmed that “control” is not confined to legal ownership but includes the ability to materially influence the policy of a firm.

A critical feature of the FCCPA is the distinction between small mergers and large mergers. Under the FCCPA, not every merger requires mandatory prior notification. Small mergers are generally not notifiable unless the Commission specifically requires notification, while large mergers must be notified in the prescribed manner and form. Accordingly, the duty to notify arises in respect of notifiable merger transactions which meet the applicable thresholds or otherwise fall within the Commission’s notification requirements.

The applicable thresholds are set out in the Notice of Threshold for Merger Notification issued pursuant to section 93(4) of the FCCPA. Under that notice, a merger becomes notifiable where, among other things, the combined annual turnover of the acquiring undertaking and the target undertaking in, into, or from Nigeria equals or exceeds One Billion naira, or the annual turnover of the target undertaking in, into, or from Nigeria equals or exceeds Five Hundred Million naira. These thresholds determine whether a transaction falls within the Commission’s mandatory pre-merger review jurisdiction.

Recent transactional practice in Nigeria demonstrates the application of the FCCPA merger control regime. A notable example is the acquisition of a controlling stake (71.69%) in Honeywell Flour Mills Plc by Flour Mills of Nigeria Plc, a transaction which attracted regulatory review by the Federal Competition and Consumer Protection Commission due to its implications for concentration within the flour milling sector. This transaction illustrates the practical importance of obtaining regulatory clearance in industries with a limited number of significant market participants.

Once a merger is notifiable, the Act is clear that it must not be implemented before the approval of the Commission is obtained. Section 93 provides that a proposed merger subject to the notification threshold shall not be implemented unless it has first been notified to and approved by the Commission. Section 96 further reinforces this position in relation to large mergers, providing that parties shall not implement such a merger unless and until it has been approved, with or without conditions, by the Commission; any step taken in contravention of that requirement is void. The implication is that premature consummation of a notifiable transaction exposes parties to both regulatory sanctions and validity risks.

This position is consistent with merger control regimes in other jurisdictions. In the European Union, the Court of Justice in Ernst & Young P/S v Konkurrencerådet clarified the scope of the standstill obligation, holding that steps capable of contributing to a change of control may constitute unlawful early implementation.

In reviewing a merger, the FCCPC applies the substantive test of whether the transaction is likely to substantially prevent or lessen competition in the relevant market. Where anti-competitive effects are identified, the Commission must then consider whether the merger is likely to generate technological efficiency or other pro-competitive gains that outweigh those effects, or whether the transaction may be justified on substantial public interest grounds.

The inclusion of public interest as part of merger review is an important feature of the FCCPA. Nigerian merger regulation does not focus exclusively on market structure or pricing effects; it also permits consideration of broader economic implications where appropriate.

The statutory framework is complemented by the FCCPC Merger Review Regulations 2021 and related instruments published by the Commission. These instruments govern the filing and review process under Part XII of the Act and underscore the need for careful procedural compliance. The Commission has also encouraged early engagement, including pre-notification consultations where necessary, as a means of facilitating regulatory certainty and efficient review. For transaction counsel, early merger-control assessment is now an indispensable aspect of deal execution.

The consequences of non-notification are significant. In its recent warning, the FCCPC reiterated that any qualifying transaction that meets the prescribed threshold must be notified to the Commission for prior review and approval before implementation, and that failure to notify may attract penalties and other enforcement action. This warning makes clear that the Commission expects compliance not only from merging firms, but also from legal advisers involved in structuring and implementing transactions.

Although Nigerian merger jurisprudence under the FCCPA remains in an emergent phase, the broader enforcement climate is becoming more assertive. A notable illustration is the decision of the Competition and Consumer Protection Tribunal upholding the FCCPC’s 220 million dollars administrative penalty against Meta Platforms Incorporated and WhatsApp LLC. While that matter did not arise from merger control, it reflects the Tribunal’s willingness to affirm the Commission’s authority and enforcement posture under the FCCPA.

Non-compliance with merger notification and approval requirements under the FCCPA exposes parties to administrative penalties, including fines of up to 2% of turnover under the FCCPC Administrative Penalties Regulations 2020. In addition, the FCCPC retains broad powers to review and impose remedies on completed transactions, including requiring a merger to be unwound or restructured where necessary.

For legal practitioners, the implications are straightforward. Advisers must determine at an early stage whether a transaction constitutes a merger within the meaning of section 92, whether it meets the applicable thresholds, and whether any proposed step could amount to implementation before approval. Competition law analysis is therefore central to M&A advisory practice in Nigeria.

In conclusion, the merger control regime established by the FCCPA reflects Nigeria’s commitment to a structured system of competition regulation. Notifiable mergers must be disclosed to and approved by the FCCPC before implementation. Compliance with merger notification requirements is a substantive legal obligation, breach of which may affect both the validity and commercial outcome of a transaction.

Eghonghon Akhimien Esq
Junior Associate
Regville Associates