Merger Control 2023 Comparisons

The Arab Republic of Egypt aims to guarantee a good economic environment that does not restrict, prevent, or damage the freedom of competition, and therefore issued Law No 3 of the year 2005 on Protection of Competition and Prohibition of Monopolistic Practice (“Egyptian Competition Law”). The Egyptian Competition Law has since been amended four times, first in 2008, then in 2010, 2014, and, most recently, the merger control law was amended by Law No 175 of 2022 (“Amendments”). The Amendments were published in the official gazette in December 2022; however, the Executive Regulations are yet to be issued. The Amendments are now considered to be a significant leap of a long-anticipated development of the Egyptian merger control regime that has been under consideration for the last decade.

The Egyptian Competition Law applies to all natural and juristic persons and entities operating in the market in general. The provisions of the Egyptian Competition Law also apply to acts committed abroad if such acts result in preventing, restricting, or harming freedom of competition in the Arab Republic of Egypt, which constitute crimes according to the Egyptian Competition Law.

The Egyptian Competition Authority may, from time to time, also issue decisions which could be used for guidance purposes to interpret the letter of the Egyptian Competition Law.

Other than the Egyptian Competition Law, the other specific legislations may be considered for certain sectors, as follows.

• The National Telecommunications Regulatory Authority (NTRA) applies Articles 4 and 24 of the Telecommunications Law No 10 of 2003 to regulate competition and to ensure economic freedom in the sector. The NTRA examines and detects mergers indirectly through reviewing the licence requirements of any given operator. The NTRA would assess and evaluate any merger on the basis of its impact on competition. In the event that the NTRA foresees or detects a violation of law, they would threaten or directly block any merger by revoking the merging entities’ licences.
• The Central Bank of Egypt (CBE) acts as the regulator of the banking system. The Banking Law No 194 of 2020 (“Banking Law”), provides in Article 74 that the CBE shall approve the applications to own more than 10% stake (and any increase thereof) in a bank or any other percentage that would enable any natural or corporate person or their related parties to have control over the management or decision-making in the bank. Failing to abide by the aforementioned, the voting rights and the distribution of dividends correspondent to shares exceeding the authorised percentage shall be suspended. In this event, the individual or entity in breach shall dispose of the shares exceeding the percentage within six months from the date of their transfer, the Central Bank may request from the Financial Regulatory Authority (FRA) the appointment of a brokerage firm to conduct the procedures for selling the shares. The proceeds of the sale of shares shall be apportioned to the shareholder after deducting the correspondent expenses.
• Economic concentrations related to activities that are regulated by the FRA are subject to a special clearance process. Such transactions shall first be notified to the FRA prior to the execution of the transaction documents, then the FRA consults with the Egyptian Competition Authority before clearing the economic concentration.
• Additional regulatory agencies in the Egyptian market, including but not limited to the Egyptian Electric Utility and Gas Regulatory Authority, may also require prior approval before the conclusion of a transaction which would result in the acquisition of control over a specific company which operates in the relevant sector. The Egyptian Competition Authority’s relationship with all these agencies is a complementary relationship where the primary goal is to protect consumer rights and the public interest.

It is worth noting that the Egyptian Competition Law provides that one of the functions of the Egyptian Competition Authority is to co-ordinate with the sectoral regulatory agencies in matters of common interest, without prejudice to the functions of the various agencies.

In the same vein, despite the overlapping jurisdiction of the various regulators in respect of competition matters, the merger notification regime instated by Article 19 of the Egyptian Competition Law remains applicable to all sectors making any merger control subject to the jurisdiction of the Egyptian Competition Authority.

The Egyptian Competition Authority was created by virtue of the Egyptian Competition Law as an independent body affiliated directly with the Prime Minister. The Egyptian Competition Authority is mandated to act as the administrative body responsible for safeguarding a climate in which competitors have equal opportunities to compete in all economic sectors. In order for the Egyptian Competition Authority to perform its duties, it may request the assistance, and further clarifications in certain sectors, from the relevant regulatory authorities governing such sectors, whereby such regulatory authorities would be considered experts in the field without having a vote on the matter.

While the notification in case of an economic concentration which satisfies certain requirements is compulsory by virtue of the Egyptian Competition Law, following the issuance of the Amendments, the Egyptian Competition Authority has published a press release which provides the following:

• transactions (mergers, acquisitions (including stock and asset deals), capital increases, and joint ventures) closed after the 30 December 2022 but prior to issuance of the Executive Regulations shall not be subject to post- or pre-closing merger filing obligations; and
• transactions that will be closed after the issuance of the Executive Regulations shall be subject to the pre-closing merger control regime, if such transactions satisfy the filing requirements, regardless of whether the relevant transaction documents were signed prior to issuance of the Executive Regulations. 

In this respect, other than the procedural exception stipulated herein above with respect to companies which are governed by the FRA, the Egyptian Competition Law provides that the following cases shall not be deemed as economic concentration:

• corporate restructuring that does not involve a change of control or material influence directly or indirectly; and
• acquisition by financial securities firms of financial securities for the purpose of reselling them within one year; provided that such acquisition does not give the acquirers any rights or influence over the strategic decisions of the target.

The Egyptian Competition Authority has the power to extend the resale period for one year.

Failure to abide by the notification requirement shall be penalised by a fine ranging between 1% and 10% of the total annual turnover, asset value, or transaction value (whichever is higher based on the final audited financial statements of the concerned parties jointly). The penalty will be imposed on any person/entity which:

• fails to correctly notify the Egyptian Competition Authority of the economic concentration;
• fails to comply with the decisions issued by the Egyptian Competition Authority after the review and examination are conducted; or
• obtains clearance for the economic concentration after knowingly submitting false information and documents to achieve such target.

The Egyptian Competition Law and Amendments also set forth penalties in the event a calculation of the said percentages is impossible. A fine of at least EGP30 million shall be imposed and it will not exceed EGP500 million.

In this respect, it is worth highlighting that the application of such penalty has not been tested as the Executive Regulations have not been issued to date.

Transactions subject of the filing are those by which an economic concentration is created. Economic concentration under the Egyptian Competition Law is defined to capture any change of control or material influence which takes place as a result of:

• a merger, whether by establishing a new entity and terminating the other entity (in whole or in part), or within an existing entity;
• an acquisition for control or material influence by another person, whether direct or indirect, partial or whole, joint or individual, and whether through asset or stock sale; or
• the establishment of a joint venture project or the acquisition of an entity established for the purpose of undertaking a joint venture project and engaging in economic activity independently and continuously. In this respect, the shareholders’ agreements or any changes to articles of association that go through an amendment that impacts or triggers a change in control provision that changes the rights of any of the shareholders or the quorum shall be caught by the Egyptian Competition Authority.

By way of exception, corporate restructuring does not involve a change of control or material influence directly or indirectly.

The Amendments define control as “the ability of the controlling person or persons to exercise an effective influence, directly or indirectly, by directing the economic decisions of another person or persons, either based on the majority in voting rights or on the ability of the controlling person in taking economic decisions concerning the person or other persons, or in any other way, and this includes every situation, agreement, or ownership of shares or stakes of any percentage, provided that it leads to actual control of management or decision-making”. Hence, in case of an acquisition of a minority stake that would provide the acquirer with rights including reserved matters, such acquisition may be subject to the notification requirement.

Pursuant to the Amendments, transactions which meet either of the following turnover/value of assets thresholds must be notified to the Egyptian Competition Authority:

• if the combined annual turnover or consolidated assets of the parties in Egypt exceeds EGP900 million (approximately USD29 million) in the previous financial year, based on audited financial statements, and the turnover of at least two persons and each of the relevant persons (ie, companies or parties) exceeds EGP200 million (approximately USD6.5 million) in Egypt in the previous financial year, based on audited financial statements; or
• if the global combined annual turnover or consolidated assets of the parties exceeds EGP7.5 billion in the previous financial year, and one of the parties to the transaction has an annual turnover in Egypt that exceeds EGP200 million in the previous financial year, based on audited financial statements.

The Egyptian Competition Authority reserves the right to intervene in transactions below these thresholds within one year of closing if there are indications that the said transaction has resulted in a restriction to the freedom of competition.

Additional sectorial thresholds may apply, which remain subject to the review of the relevant regulatory authority. By way of example, the Capital Market Law No 95 of 1992 obliges the acquirer of a stake exceeding 33% of any listed company to launch a mandatory tender offer to acquire up to 100% of the shares of the company. The requirement is intended for transparency purposes and to provide minority shareholders with an equal opportunity to cash in on their investments at the same level of economic benefit available to majority shareholders.

While the thresholds are identified based on the latest audited financial statements, the Executive Regulations shall identify the method for calculating the annual turnover and combined assets. It is not clear whether or not the Executive Regulations will impose a foreign currency conversion equation. In case the Executive Regulations are silent, the Egyptian Competition Authority shall, subject to its own discretion, specify the equation on which the foreign currency conversion was based.

The Executive Regulations (still to be issued) are expected to provide the relevant means for calculating the annual turnovers and combined assets. However, based on non-official Egyptian Competition Authority guides that are yet anticipated to be published under the Executive Regulations, the seller’s turnover in principle shall not be included. However, under certain circumstances where the seller does not fully exit, the turnover of the remaining stake may be calculated.

Based on the principle of extraterritoriality of the Egyptian Competition Law, foreign-to-foreign transactions are theoretically supposed to fall within the scope of application of Article 19 of the Egyptian Competition Law if they are considered to have an impact on the Egyptian market.

In this respect, in case there is no local presence, the internal turnover shall satisfy certain thresholds, as detailed herein above, provided that the annual turnover for one of the relevant persons in Egypt is EGP200 million (approximately USD6.5 million).

It is worth highlighting that the Egyptian Competition Authority’s latest guidelines governing the old regime explicitly included foreign-to-foreign transactions in the scope of post-filing notification. According to the guidelines, the threshold for notification was limited to the turnover generated in Egypt alone.

In light of the foregoing, the Executive Regulations and/or the guidelines which may be issued by the Egyptian Competition Authority are anticipated to confirm that transactions without local nexus in Egypt may still be subject to filing under the new pre-closing notification regime, where the international thresholds are met.

It is not clear yet if the Executive Regulations will provide additional details with respect to the market share. The Amendments currently provide that national and international, combined and individual annual turnover of the parties involved with the transaction are applicable.

Full function joint ventures are subject to merger control by the Egyptian Competition Authority. A joint venture of two or more persons, resulting in performing, on a lasting basis, an autonomous economic or commercial activity, regardless of its legal form or the activity to be practiced, is considered an economic concentration, which shall be subject to the notification if the thresholds set out in our commentary in 2.5 Jurisdictional Thresholds are met.

The Egyptian Competition Authority reserves the right to intervene in transactions below the jurisdictional thresholds within one year of closing if there are indications that the said transactions have resulted in a restriction to the freedom of competition. The mechanism of such intervention shall be detailed under the Executive Regulations.

The new pre-merger control regime is suspensory by nature. Hence, closing of a transaction shall not take place unless the prior approval of the Egyptian Competition Authority is issued.

In the event that a transaction is implemented before clearance, the Egyptian Competition Authority may impose a fine of at least 1%, which cannot exceed 10% of the total annual turnover, asset value, or transaction value (whichever is higher based on the final audited financial statements of the concerned parties jointly). The penalty will be imposed on any person/entity which:

• fails to correctly notify the Egyptian Competition Authority of the economic concentration;
• fails to comply with the decisions issued by the Egyptian Competition Authority after the review and examination are conducted; or
• obtains clearance for the economic concentration after knowingly submitting false information and documents to achieve such target.

The Egyptian Competition Law and Amendments set forth penalties in the event a calculation of the said percentages is impossible. A fine of at least EGP30 million shall be imposed and it will not exceed EGP500 million.

The Egyptian Competition Authority and the Egyptian Competition Law do not state any exceptions to suspensive effect related to public bids, or international cross-border mergers. They follow the same process stated above, noting that if such bid is related to the public utilities which are directly run by the state, such public utilities will be exempted from the application on the Egyptian Competition Law in its entirety.

There are only three exceptions to the creation of economic concentrations which the Egyptian Competition Authority may allow in consultation with the Cabinet, which pertain to the exit of certain persons (as defined under the Egyptian Competition Law), if the transaction generates economic efficiency, or any transaction that is related to national safety.

This circumstance is not covered under the Egyptian Competition Law. However, based on our experience, the Egyptian Competition Authority may, on a case-by-case basis, be approached to grant the stakeholders its clearance of hold a separate agreement.

The Egyptian Competition Authority shall be notified, with immediate effect, of any economic concentration which satisfies the jurisdictional threshold. Failure to notify before closing a transaction would trigger a fine as detailed previously.

The merger notification must be submitted before the closing of the transaction. Therefore, conservatively speaking, the notification must be submitted immediately upon signing any agreement which confirms the parties’ intentions to create an economic concentration as defined under the Egyptian Competition Law.

The maximum fees stated in the Amendments are EGP100,000 (approximately USD4,000) in addition to the fees related to publishing the decision.

Persons directly involved in the economic concentration are required to submit the application to the Egyptian Competition Authority. Given that Executive Regulations are not issued, the relevant stakeholders responsible for filing are not yet crystal clear. It is assumed that the acquirer and the target entities shall be the persons responsible for the filing, noting that if a seller will not fully exit, then such seller may also be deemed a responsible person.

While the Executive Regulations have not yet been issued, it is anticipated that similar information would be required, as was the case in the post-closing regime, as detailed under the old Executive Regulations of the Egyptian Competition Law, which mainly cover the following:

• the name of the notifying party and their related parties, their respective nationalities, the addresses of their headquarters, and their main place of business;
• the details of the transaction along with its date and the legal position it creates;
• the licences and approvals obtained from other regulators and all supporting documents;
• approximate market shares of the relevant parties and their competitors in each of the relevant markets;
• any details regarding the estimated period for a new competitor to enter any of the relevant markets; and
• the details and key information concerning the most important clients targeted, the distributors, and the agents of the relevant parties, each within their scope of activities in the Arab Republic of Egypt.

Typically, the Egyptian Competition Authority will notify the applicants of additional information requested. Otherwise, failure to provide a complete application may result in the Egyptian Competition Authority rejecting the application, or other corrective action the Egyptian Competition Authority deems appropriate.

In the event that a transaction is implemented before clearance, the Egyptian Competition Authority may impose a fine of at least 1%, which cannot exceed 10% of the total annual turnover, asset value, or transaction value (whichever is higher based on the final audited financial statements of the concerned parties jointly).

The review process may be only for a sole phase or it may be divided into two phases. Once an application or notification is communicated before the Egyptian Competition Authority they will undergo the examination and review of the application, for the purposes of determining whether the economic concentration will have a negative effect on competition in the different sectors and relevant markets. This examination usually takes 30 working days, however, this period may be subject to extension for an additional 15 working days if the parties involved are requested to submit an obligation and commitments memorandum to the Egyptian Competition Authority, as it is anticipated for the executive regulations.

After the preliminary review, the Egyptian Competition Authority will be entitled to issue decisions that encompass one of the following options:

• incompetence to examine the economic concentration;
• dismissal of the notification for the suspension or retraction in the decision of establishing/executing the transaction resulting in the economic concentration;
• approval of the economic concentration;
• conditional approval; or
• referral to a second review phase.

In all circumstances, if the Egyptian Competition Authority remains silent or does not revert back with a decision or feedback within the above-mentioned period and timeline, the economic concentration will be considered cleared.

In the event of referral to a second review phase, it will be conducted in the following manner.

• The Egyptian Competition Authority will conduct its review within 60 working days from the referral decision.
• This period may be extended for an additional 15 working days if the parties involved are required to submit an obligation and commitments memorandum to the Egyptian Competition Authority as it is anticipated to be included in the executive regulations.

After the Egyptian Competition Authority conducts its review, it will issue one of the following decisions:

• dismissal of the notification (if the relevant parties decide not to proceed with establishing/executing the transaction resulting in the economic concentration);
• approval of the economic concentration;
• conditional approval; or
• rejection (which may be appealed within 30 days from the date the decision is notified to the parties).

In the same vein, if the Egyptian Competition Authority does not provide any feedback or remains silent within the review period mentioned above, the economic concentration will be considered cleared.

In general, pre-notification discussions with authorities can be conducted. Any person who desires to engage in an economic concentration may apply for a meeting prior to submission of an application.

Requests for information are common and expected, depending on the application submitted. Requests will effectively suspend the time otherwise imposed by the Egyptian Competition Authority to process an application.

There is no particular reference in the Amendments, to the accelerated procedure option.

When considering an application, the Egyptian Competition Authority considers the following standards, which will soon be supported by the Executive Regulations:

• maintaining and encouraging effective competition amongst competitors in the market;
• examining whether or not the economic concentration will result in certain negative effects on economic growth and efficiency, and whether or not it will impact the considerations connected to the protection of national security;
• maintaining diversity of operators providing products or distributing products in a certain market;
• maintaining price, product, and services diversity;
• enhancing technological development and innovation;
• avoiding market control and market concentration by increasing or decreasing prices; and
• maintaining high-quality products and/or avoiding any market-entry obstacles or blocks, or any market expansion obstacles.

We anticipate that the Executive Regulations will be treating this point extensively and this issue will be raised by the Egyptian Competition Authority.

Regarding the definition of market, the relevant market under the Egyptian Competition Law is composed of two elements.

• The relevant product (good or service) and the relevant geographical area. Relevant products are those that are effective substitutes from the consumer’s point of view. The main illustrative criteria to consider one product as a substitute for another are the similarity in the specifications or usages of those products and the likelihood that consumers would switch from one product to another for changes in price or any other competitive factors.
• A secondary criterion is whether the sellers make their business decisions based on the switching of consumers from the product due to price changes or any other competitive factors.

The geographical scope is the area where competitive conditions are homogenous, taking into consideration potential competitive opportunities. Under Article 6 of the executive regulations, two criteria are taken into consideration:

• the ability of the buyer to move from the relevant geographical area to another in Egypt or abroad as a result of changes in pricing or other competitive circumstances; and
• the ability of the seller in Egypt or abroad to move to the relevant geographical area as a result of price changes or other competitive circumstances.

Certain factors must be taken into consideration to evaluate the ability of the buyers and sellers:

• transportation costs (including consumed time and insurance fees); and
• customs and other non-customs restraints.

The Egyptian Competition Authority is proactive when it comes to references to precedents and case law. We anticipate a reliance on case law weighting in important and strategic sectors.

Many competition concerns are connected to vertical and horizontal arrangements and abuse of dominance, particularly if the market share is high and the struggle faced by local operators in the Egyptian economic scene, especially with the rise of many economic challenges whether in the local or global arena. The Egyptian Competition Authority focuses its efforts on providing a more equally efficient platform for the existing operators and allowing a space for other operators to penetrate the relevant markets in the future. The main concern would be addressing sustainable competition in strategic sectors such as healthcare, food, and products of national security.

The Egyptian Competition Authority considers the possible influence on economic efficiencies; however, the extent of such consideration is not apparent.

The industrial policy, the user/consumer interest, the public interest, national security, economic efficiencies, and the protection of minority shareholders are all factors considered when clearance and pre-approval are needed in specific sectors such as telecommunications and banking. The firm anticipates that the same would apply from a strict Egyptian Competition Law perspective since the approval and clearance of the Egyptian Competition Authority is required as a combined condition to closing transactions.

There are no other special rules provided for in the Egyptian Competition Law pertaining to joint ventures in particular. It is anticipated that the Egyptian Competition Authority would possibly examine the collaborative impact or issues between related joint venture parents.

The Egyptian Competition Authority can take corrective actions for violations of the Competition Law. Such corrective actions may include divestment undertakings and behavioural actions.

In the event that the execution of the transaction requires written authorisation from the NTRA or the CBE and falls under the category triggering both authorities’ necessary consent and the said written approval has neither been requested nor granted, the NTRA or the CBE in terms of practice may be entitled to block the execution of the transaction or suspend it. The special regulators, the NTRA and CBE, may intervene in such circumstance and the concerned parties must undertake the required procedure or else their operational licences might be revoked.

This would be further examined in practice with the implementation of the new Amendments and examination of the Egyptian Competition Authority’s treatment on a case-by-case basis.

The legal standard for remedies is not enshrined in the Egyptian Competition Law. In this respect, it is presumed that the precedents that will be made will be deemed the standard practice once the Amendments are fully in force.

Based on the firm’s understanding of the Egyptian Competition Law, and informal discussion with Egyptian Competition Authority officials, it is possible to remedy competition issues; eg, by giving divestment undertakings or behavioural remedies.

Violations of the Egyptian Competition Law can be settled upon the approval by the Egyptian Competition Authority’s board. If the settlement was concluded before filing the criminal lawsuit or taking any procedures in this respect, the minimum stipulated fine shall be the maximum of the settlement amount. If the settlement was made after filing the criminal lawsuit or taking any procedures in it, but before issuance of the final court judgment, an amount of no less than three times the minimum stipulated fine and no more than half of its maximum shall be paid. Settlement shall terminate the criminal lawsuit. Agreements that violate the Egyptian Competition Law are considered null and void for having a criminal purpose.

Private enforcement of the Egyptian Competition Law in Egypt is still at an early stage. However, as per the general rules of Egyptian civil law, persons that are harmed by the violations of the Egyptian Competition Law can claim compensation from the competent court for the actions of the person committing the violation, in case specific performance was not feasible. This does not have to be related to the criminal court action, and the plaintiff can request compensation before the competent civil court even if the Egyptian Competition Authority did not refer the matter to the court.

The Amendments remain silent on this point. The firm anticipates witnessing more information regarding the implementation of negotiation remedies with the Egyptian Competition Authority, upon the issuance of the Executive Regulations and the application of the Amendments.

The conditions and timing for divestitures are not enshrined in the Egyptian Competition Law or the Executive Regulations that are yet to be published. It is anticipated that the Egyptian Competition Authority will issue a guideline related to the remedies. If not, it will be considered on a case-by-case basis.

Formal decisions permitting or prohibiting transactions are made publicly available by the Egyptian Competition Authority and are generally published on the authority’s website.

We anticipate the application of prohibitions and more extensive presentation of the same in the Executive Regulations. In the event that the Egyptian Competition Authority concludes that a foreign-to-foreign transaction would fundamentally affect the strategic ownership and management of the locally based entities subject to the Egyptian jurisdiction, no action may directly be taken against the foreign entity but following the international precedents and in co-ordination with the relevant regulatory bodies, the operating licences of the local entities might be subject to revocation or suspension for reasons related to transparency, public interest, or national security.

The details and scope of the Amendments will become clearer once the Executive Regulations are issued and via ancillary regulations, and the firm also expects that there will be guidelines published in the upcoming months.

The Egyptian Competition Law provides that the Egyptian Competition Authority may seek experts’ opinions. However, such experts shall not have any powers in the decision-making process.

This is a part of the upcoming Egyptian Competition Authority scheme. However, there are no provisions under the regulations or the Egyptian Competition Law addressing this. It is yet to be examined under the new Egyptian Competition Authority guidelines.

The employees of the Egyptian Competition Authority have a duty to keep information and sources confidential. This information and data, as well as the relevant sources, shall not be used for any purposes other than those for which they were submitted.

Furthermore, commercially sensitive information is not usually required for the purpose of the notification. Generally, any Egyptian Competition Authority employee having access to commercial information of any entity is prohibited from working for a competitor of the concerned party for a period of two years from the date the said employee gained access to the confidential information.

The Egyptian Competition Authority has recently been implementing several protocols with different jurisdictions, such as the Kingdom of Saudi Arabia (KSA) and many Arab states, for the establishment of a co-operative ecosystem.

In 2019, the Egyptian Competition Authority signed a bilateral institutional partnership with the German Federal Ministry for Economic Affairs and Energy, and the Federal German Competition Authority, which has contributed to strengthening the institutional and enforcement capacity of the Egyptian Competition Authority through knowledge sharing and internal capacity building. The valuable and successful co-operation incentivised both sides to renew the Joint Declaration of Intent in 2020 to establish a more extensive level of co-operation with hands-on case-handling experience sharing, policy review and guidelines development, as well as a more practical on-the-job work co-ordination and knowledge sharing.

The Egyptian Competition Authority also co-operates with the Common Market for Eastern and Southern Africa (COMESA) Competition Commission regarding merger notifications. Article 25(6) of the 2004 COMESA Competition Regulations states that the Commission may notify member states subject to a merger, and request their written opinions. Regarding the requests from the COMESA Competition Commission, the Egyptian Competition Authority reviewed 21 notifications and examined the potential impact of the mergers on the Egyptian market.

As a general rule, the decisions of the Egyptian Competition Authority are administrative in nature and can be appealed before the administrative court, unless the matter is referred to the prosecutor, the competence of the criminal court or, more particularly, the criminal courts which are specialised in considering economic crimes. Specifically, if the decision of the Egyptian Competition Authority entails a rejection of the economic concentration, the decision could be appealed.

Appealing a rejection of an economic concentration shall take place within 30 days from being notified of such decision. From a practical standpoint and in general, litigation in Egypt is a lengthy process. Given that the pre-merger control has been newly introduced by virtue of the Amendments, there are no successful appeals in relation.

As a general rule under Egyptian law, if a third-party appeals a decision, the appeal is highly likely to be rejected as it was filed by a person without a proper legal capacity.

The filing requirements for foreign subsidies follow the same filing requirements and provisions enshrined in the Egyptian Competition Law and its Amendments related to merger control.

The most recent and predominant developments are the Amendments and the awaiting of the issuance of the Executive Regulations. Subject to the issuance of the Executive Regulations, the Egyptian Competition Authority may decide to issue guidelines in respect of pre-merger filing.

While the statistics of enforcement records are not generally disclosed and published on the Egyptian Competition Authority’s website, major decisions of the Authority may be released. Below, the firm has set out an example of a major decision which affected the merger control regime in the recent years.

Typically, mergers/acquisitions between competitors are not regarded by the Egyptian Competition Law as horizontal agreements which are prohibited by the Egyptian Competition Law, unless approved by the Egyptian Competition Authority.

In 2018, the Egyptian Competition Authority adopted a different approach regarding mergers/acquisitions between competitors (in this case both have a significant share covering almost the whole market). The Egyptian Competition Authority regarded the potential acquisition between Uber and Careem (two of the biggest transportation companies using ride-hailing apps) to be a horizontal agreement and, as such, violating Article 6 (a) and (d) of the Competition Law. As a result, the Egyptian Competition Authority issued Decision No 26 on 23 October 2018, whereby it obliged said companies and their related parties, including the companies participating in their shareholdings, to obtain its approval prior to concluding any agreement related to a merger, establishing joint ventures, and the purchase or sale of shares or assets of either company directly or indirectly.

By virtue of the Amendments, the Egyptian Competition Authority will have a wider discretion to investigate transactions once the filing takes place. However, given the lack of the Executive Regulations, the enforceability of the Amendments remains unclear as it has not been tested yet.

Once the Executive Regulations are issued, the firm anticipates the disclosure of the enforcement records for the following year on all foreign-to-foreign mergers.

Sources other than the official site of the Egyptian Competition Authority reveal that the Authority took decisions for more than 344 matters in different sectors and markets during 2022.

• The healthcare sector constituted the biggest record, with 283 matters having been studied, representing 82% of the total.
• The real estate sector came second for the enforcement record, comprising 16 matters.
• The food and beverage sector came third in line with 12 matters.
• Seven matters were examined for cars and automobiles.
• Four matters were studied for electricity, power, infrastructure elements, and education.
• Two matters were considered for each of the areas of telecommunication, media, and agriculture.

The Egyptian Competition Authority approved 267 economic concentrations, detected 16 violations, started criminal procedures in seven cases, rejected three requests for exemption and approved two, and issued settlements for 15 cases.

The Egyptian Competition Authority currently faces great challenges regarding economic concentrations taking place in the country. One of the main goals of the Egyptian Competition Authority is to set safe grounds for local and domestic economic operators to compete in the Egyptian market. We will see the implementation and effects of the merger control notifications and the merger control system once the Executive Regulations are issued.

The Egyptian Competition Authority’s official statement assured that those Amendments are drawn for the purposes of alignment with Egypt’s vision towards 2030 which mainly focuses on sustainable economic growth and compliance with the state strategic policies for a more prosperous environment in all sectors and the economy as a whole.