NIGERIA Law and Practice Contributed by: Tosin Ajose, Izuchukwu Ubadinma, Deborah Leshi and Precious Omope, DealHQ Partners
ers, takeovers and business combinations, to ensure compliance with competition rules. A large merger (ie, where the combined annual turno- ver of the acquiring and target companies is NGN1 billion or more, or where the target company’s annual turnover is NGN500 million or more in the preceding financial year) must be notified to the FCCPC prior to completion. Small mergers below these thresholds are not automatically subject to notification, unless the FCCPC, within six months of implementation, deter- mines that the transaction may substantially prevent or lessen competition. The FCCPA mandates the following filing require- ments: • parties must complete the merger notification form (FCCPC Form 1) – this application can be made jointly or separately; • the application is to be submitted alongside sup- porting documents, including all transaction agree- ments, board resolutions, the most recent annual report and accounts, and business plans; • the Commission publishes the notice on its website within three business days for small mergers and within seven business days for large mergers; and • the merging parties are equally required to serve copies of the notice to relevant registered trade unions and the employees of the acquiring and target companies. 5.6 Labour Law Regulations In M&A in Nigeria, acquirers must consider labour laws governing employment contracts, employee rights, trade union representation, occupational safe- ty, pensions and severance entitlements. Key legis- lation includes the Labour Act (Cap L1 LFN 2004), the Trade Unions Act 2004, the Pensions Reform Act 2014, the Employees’ Compensation Act 2010 and the National Minimum Wage (Amendment) Act 2024. Employees of a target company are not automatically transferred to the acquirer. Any transfer requires the employees’ written consent and endorsement by an authorised labour officer, applicable only to “workers” performing manual or clerical duties.
For redundancies arising from M&A, employers must inform trade unions or workers’ representatives of the reasons and extent of layoffs, adopt a fair selec- tion principle, and negotiate adequate severance for affected employees. While Nigeria does not have a statutory works coun- cil system like in the EU, labour consultation is con- ducted through registered trade unions, which act as collective bargaining representatives. Employers are required to engage with these unions to discuss workforce reductions and negotiate severance terms, where applicable. Final decision-making author- ity, however, rests with the company’s management board, although failure to consult or consider the union’s input may lead to industrial disputes. 5.7 Currency Control/Central Bank Approval Nigeria operates a currency control framework under the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, supervised by the CBN. For M&A transactions involving a foreign acquirer, all payments must pass through authorised dealer banks. The for- eign acquirer must obtain a Certificate of Capital Importation, which formalises the right to repatriate profits, dividends or proceeds from asset sales. CBN approval is only required for M&A transactions involving banks or other CBN-licensed financial insti- tutions that result in a change of control. Other M&A transactions do not require CBN approval and are instead subject to oversight by the FCCPC or other relevant sector regulators. 6. Recent Legal Developments 6.1 Significant Court Decisions or Legal Developments In the past three years, a few landmark cases have significantly shaped Nigeria’s energy and infrastruc- ture landscape, especially in how they influence deal- making, risk management and investor confidence. • A pivotal case was Process & Industrial Develop- ments (P&ID) v Federal Republic of Nigeria , where Nigeria successfully set aside an USD11 billion arbitral award arising from a fraudulent gas pro-
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