The prohibition against business mergers and acquisitions fundamentally lies on the test of a substantial lessening of competition. The prohibition relates to the structure of the market rather than to the behavior in that market. Acquiring shares or assets of other businesses that would result in a substantial lessening of competition in a market without the approval of the ICCC can raise serious competition concerns for the ICCC. It is prohibited by law because the acquisition of one competitor by another can have just as much serious anti-competitive consequences as the MCR.

The merger function of the ICCC also requires that a business merger or acquisition would meet the mandatory notification, the acquiring party must notify the ICCC in advance through a Clearance application before completing the transaction. Failure to do so may result in a default fine of K750,000.00. This is apart from any investigation for substantial lessening of competition concerns.

The ICCC Act allows the ICCC to formally approve otherwise anti-competitive business acquisitions through the adjudication processes of Clearance or Authorization. A Clearance or Authorization granted by the ICCC for a particular transaction provides immunity from the application of the ICCC Act.

It is required that the acquiring party apply for Clearance. The ICCC can also direct a party who has applied for clearance to apply for Authorization instead if the ICCC believes that the transaction subject of the Clearance application should be considered under the Authorization process. The ICCC can give a Clearance if it is satisfied that the proposed acquisition would not have any effect of substantially lessening competition in a market. Where Clearance is sought, the ICCC only assesses the competition effects of the proposed acquisition.

If there are serious anti-competitive effects that may likely arise from the proposed acquisition, the ICCC is required by law not to approve the proposed merger or acquisition. There has to be clear and sufficient evidence to show that the proposed merger or acquisition would not give rise to any substantial anticompetitive effects in order for the ICCC to approve the proposed merger/acquisition.

Clearance is an adjudication process. Therefore, the onus is on the applicant to provide the ICCC with relevant information clarifying where the areas of concern are and how these aspects are not likely to have the effect of substantially lessening competition.

When a Clearance is received and registered, the ICCC must give a decision within 20 days after the date of registration. This period may be extended if further information is requested from the applicant; and or there has been mutual consent between the ICCC and the applicant for an extension.

The ICCC’s previous decisions and progress of current Clearance applications can be found on the Public Register.

The ICCC can also grant Authorization for a business acquisition that would otherwise have the effect of substantially lessening competition. The test for Authorization is that the proposed acquisition would result in net public benefit. The application for Authorization is only upon a direction from the ICCC to do so.

Authorization of business acquisition is a two-stage process. The ICCC is first required to assess the competition effects of the proposed acquisitions in the relevant market(s), to determine whether the proposed acquisition would substantially lessen competition in the relevant market. If the ICCC is satisfied that there would not be such an adverse competitive effect, the ICCC must give a Clearance. If the ICCC is not satisfied, then it must determine whether the acquisition will result or will be likely to result, in such a benefit to the public that it should be permitted.

A formal approval by the ICCC would provide immunity to parties to an acquisition to proceed with the proposed acquisition, without risking a contravention of the ICCC Act.

Like the Clearance, the onus is on the applicant to satisfy the ICCC that Authorization should be granted.

Where it considers necessary and appropriate, the ICCC may also grant Authorization subject to certain conditions.

The ICCC must give a decision on an Authorization application within 72 days after the date of registration. Like the Clearance process, this period may be extended if further information is requested from the applicant; and or if there has been mutual consent between the ICCC and the applicant for an extension.

The ICCC’s previous decisions and progress of current Authorization applications can be found on the Public Register.

As Clearance and Authorization are public and transparent processes, the ICCC may hold a pre-decision Conference. When the ICCC determines to hold a Conference, a draft determination is issued before the Conference. This is the time the applicant and other key stakeholders have the opportunity to provide comments on the draft decision of the ICCC.

All such comments are taken into consideration to come up with the final decision. The final decision may not necessarily be the same as the draft decision.

Businesses are encouraged to approach the ICCC for guidance, on an informal basis, as soon as there is a real likelihood that a proposed acquisition may proceed, and this should be done well before the completion of an acquisition.