EGYPT Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Khaled al-Khashab and Mounir Hany, GLA & Company
• non-jurisdiction; • clearance; • conditional clearance; or • block decisions.
The Egyptian Competition Law and Amendments also set out the penalties to be imposed if a calculation of these percentages is impossible. A fine of between EGP30 million and EGP500 million will be imposed. While the penalty framework is established under the ECL, as of May 2025, the ECA has not yet publicly enforced fines for merger notification failures. 2.3 Types of Transactions The Egyptian Competition Law uses a general prin - ciple of “economic concentration” to identify merger control issues. If the acquisition of the non-controlling minority share - holdings leads to a change in material influence over another person, it will be subject to the jurisdiction and review of the ECA, provided that the financial thresholds specified under the Egyptian Competition Law are met (see 2.1 Notification with respect to the express exceptions under the ECL). The ECL defines an “economic concentration” as any change of control or material influence over one or more persons. It expressly identifies the following transactions as “economic concentrations”. Mergers One person ceases to exist as a separate legal enti - ty as per its absorption by another person, which retains its legal personality after the merger (merger by absorption) or two or more persons cease to exist as separate legal entities as they are integrated into a newly created legal entity (merger by integration) Acquisition Acquisition by one or more persons, directly or indi - rectly, of control or material influence over the whole or part of another person, whether by contract, pur - chase of securities or assets or by any other means and the acquisition can be individual or collective. Joint Venture Establishment of a joint venture or the acquisition of an existing person by two or more persons for the purpose of establishing a joint venture that conducts economic activity independently and permanently.
In order for the ECA to perform its duties, it may request assistance and further clarification from the relevant regulatory authorities governing certain sec - tors. The regulatory authorities will be considered experts in the field, but will not have a vote on the matter.
2. Jurisdiction 2.1 Notification
In the event a transaction falls under the scope of an “economic concentration” under the ECL, notification is compulsory. Under the second paragraph of Article 2/g of the Egyptian Competition Law, the following transactions will not be considered an “economic concentration”. • Temporary acquisition, by any securities company, of securities in a party for the purpose of resale within one year from the date of the acquisition, provided that they do not exercise any voting right nor take any measures that would affect the strategic decisions or commercial objectives of the acquired party. The ECA may extend this period, upon request, if the acquirer proves that the resale of the securities was not possible within one year, as determined by the Executive Regulations. • An acquisition or merger between related parties. This is considered an internal restructuring and does not trigger an obligation to notify unless there is a direct or indirect change in control or material influence. 2.2 Failure to Notify Failure to abide by the notification requirement set out in Articles 19 bis a and 19 bis e of the Egyptian Com - petition Law will be sanctioned by a fine of between 1% and 10% of the total annual turnover, asset value or transaction value (whichever is higher according to the final audited consolidated financial statements).
170 CHAMBERS.COM
Powered by FlippingBook