ONLY E8 MILLION OR MORE MERGERS TO BE NOTIFIABLE

MBABANE – A merger shall now only be notifiable if the combined annual turnover or combined assets of the merging parties is E8m or more Unpacking the Competition Commission Bill of 2018, Swaziland Competition Commission (SCC) Chief Executive Officer (CEO) Thabisile Langa said the commission in terms of the proposed Section 54 of the Bill could still review a merger that does not meet the merger thresholds set forth if there is reason to believe that the merger is likely to substantially prevent or lessen competition. The highest fee to be charged for notification of a merger has been increased from E 600 000 to E1 million.

She said another significant change in the merger regime is in Section nine of the Regulations which introduces merger thresholds.
“Currently all merger transactions satisfying Section 2 of the current Competition Act are notifiable irrespective of the financial aspect of the merging parties. The proposed change is that a merger shall now only be notifiable if the combined annual turnover or combined assets of the merging parties is E8m or more,” said Langa.

Langa expalined that the bill and regulations provided for substantial changes to be made to the existing Competition Act and Regulations with respect to merger control. She said these changes were designed to fill in gaps in the existing Competition Act, to make merger control more predictable for merging parties, and to bring Eswatini merger review into harmony with that of other jurisdictions.
“We have also made changes that are intended to insure that reportable mergers are in fact notified to the Commission,” Langa pointed out.
Section 52 of the Bill defines in detail what qualifies as a “merger” under the new Bill.

Langa said one significant change was that joint ventures were now expressly included in the definition.
She mentioned that in the past there was uncertainty as to whether joint ventures were included.

“This section has also widened the scope with regards to how an acquisition of a controlling interest is achieved,” Langa explained.
She added that Section 15- 33 of the regulations provided more information and clarity on the notification of mergers, analysis, oral hearings, the decision making process and the publication of decisions. The CEO said it also provides more certainty on the standard to be applied by the Commission in assessing mergers.

“The general standard to be applied is whether a merger “is likely to substantially prevent or lessen competition,” which standard is widely accepted. The sections identify a number of factors for the Commission to consider in making its determination,” concluded Langa.

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