EGYPT Law and Practice Contributed by: Nadia Abdallah, Zahra Ashraf, Beshoy Mounir and Yasmine Attia, Matouk Bassiouny & Hennawy
cases, the appointment can proceed prior to clear- ance (which usually takes a considerable time), but the individual/entity will be replaced if the result of the
operations. Material influence is a broader concept and includes the ability of a person to affect, directly or indirectly, the policies of another person, includ- ing, but not limited to, its strategic decisions or com- mercial objective. It may arise, for example, if a per- son acquires 25% or more of voting rights, or even a smaller percentage if accompanied by other factors such as board representation, special rights under the articles of association or a shareholders’ agreement, or relative voting strength in comparison with other shareholders. Financial thresholds Threshold 1 (local threshold) This threshold consists of two sub-thresholds, both of which must be satisfied: • Local Threshold in Relation to All the Concerned Parties: The achieved combined annual turnover or the combined assets in Egypt pertaining to the concerned parties of the last year as reflected in their audited consolidated financial statements per- taining to such year exceed EGP900 million. • Local Threshold in Relation to Each of at Least Two of the Concerned Parties: The aggregate turnover of each of at least two of the concerned par- ties achieved in Egypt, as reflected in their latest audited consolidated financial statements, exceeds EGP200 million. Threshold 2 (worldwide threshold) This threshold consists of two sub-thresholds, both of which must be satisfied: • Worldwide Threshold: The worldwide combined annual turnover or combined assets pertaining to the concerned parties of the last year, as reflected in their audited consolidated financial statements pertaining to the said year, exceed EGP7.5 billion. • Local Threshold: The aggregate turnover of at least one of the concerned parties achieved in Egypt, as reflected in its latest audited consolidated financial statements, exceeds EGP200 million. Although the Executive Regulations refer to “at least one of the concerned parties”, the Guidelines issued by the ECA state that the said local threshold is applica- ble to the turnover of the target group, and not the acquirer group.
security clearance is negative. Export Control Regulations
Exportation is primarily governed by Law No 118 of 1975 regulating importation and exportation. Compa- nies undertaking exportation activities are bound by certain obligations, including the obligation to regis- ter with the Exporters’ Register held by the General Organization for Export and Import Control (GOEIC), the competent authority at the Ministry of Trade and Industry. It should be noted, however, that, without prejudice to the laws, regulations, and decrees regu- lating the importation and exportation, Article 7 of the Investment Law allows investment projects to export products, whether directly or through an intermediary, without a licence and without the need to be regis- tered with the Exporters’ Register at GOEIC. 5.5 Antitrust Regulations The Egyptian Competition Authority Pursuant to the Egyptian Competition Law No 3 of 2005, as amended from time to time (ECL), and its executive regulations, as amended from time to time (ECL ER), any transaction must be filed with the Egyp- tian Competition Authority (ECA) and approved prior to its closing if the following requirements are satis- fied. The transaction involves an “economic concentration” The ECL and ECL ER define “Economic Concentra- tion” as any change in the control or material influence of a person or several persons resulting from: (i) a merger; (ii) direct or indirect acquisition of the capac- ity to control a person(s) by virtue of an agreement or through the purchase of financial securities, assets, shares or any other means; or (iii) the establishment of a joint venture that would exercise its economic activi- ties independently from the entities that established it, on a permanent basis. Control refers to the ability to effectively direct the economic decisions of another entity, either through majority voting rights, veto rights, or any arrangement that enables decisive influence over management or
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