NIGERIA Law and Practice Contributed by: Chiagozie Hilary-Nwokonko, Chukwuyere Ebere Izuogu and Priscilla Bidemi Ben-Okoh, Streamsowers & Köhn
recognise these same theories of anti-competitive harm. 4.5 Economic Efficiencies The FCCPC considers economic efficiencies in cir - cumstances where a merger has been determined to be capable of an SPLC situation. In such cases, eco - nomic efficiencies would be considered as a trade- off evaluated against the perceived anti-competitive effects of the merger. Such economic efficiencies must result in the better utilisation of existing assets, enabling the combined firm to achieve lower costs than either firm could have achieved alone. According to the FCCPC, the party relying on efficien - cies must prove that the efficiencies are: • likely to occur; • merger-specific; and • greater than the anti-competitive effects of the proposed merger, which they will offset. 4.6 Non-Competition Issues Non-competition issues are taken into account by the FCCPC during the review process. Specifically, the following non-competition issues are considered in applicable circumstances when reviewing a merger. • Public interest gains, which must be substantial and specific to the merger. In addition, public inter - est considerations must be assessed under any of the following grounds: (a) gains relating to a particular industrial sector or region – eg, the stable supply of electricity; (b) employment; (c) the ability of national industries to compete in international markets; and (d) the ability of small and medium-sized enter- prises to become competitive. • The firm is failing, which can be used to justify the approval of an otherwise anti-competitive merger where one of the merging firms is in financial dif - ficulties or at risk of bankruptcy. • According to the FCCPC, the following conditions must be cumulatively met for the defence of a fail - ing firm to be successfully invoked: (a) the firm must be unable to meet its financial obligations in the near future;
(b) there must be no viable prospect of reorganis - ing the business through the process of receiv - ership or otherwise; (c) the assets of the failing firm would exit the relevant market in the absence of a merger transaction; and (d) there is no credible, less anti-competitive alter - native outcome than the merger in question. The analytical framework adopted by the FCCPC for assessing these defences is set out in the MRG. There are no specific rules for foreign direct invest - ment in relation to merger control. 4.7 Special Consideration for Joint Ventures The same standard applies to the substantive assess - ment of mergers and the substantive review of joint ventures. At the time of writing, there is no indication as to whether or not the FCCPC will examine possi - ble co-ordination issues between joint venture parents when reviewing a joint venture. 5. Decision: Prohibitions and Remedies 5.1 Authorities’ Ability to Prohibit or Interfere With Transactions Section 98 of the FCCPA authorises the FCCPC to direct any of its officers to investigate a merger. In exercising this power, the FCCPC may also require any person or undertaking to provide any information regarding the merger. In addition, Regulation 20 (1) of the MRR authorises the FCCPC to prohibit a merger upon the conclusion of the review process. However, the FCCPC has indicated that only mergers that lessen competition substantially will be prohib - ited. In assessing whether a merger is likely to prevent or lessen competition substantially, the FCCPC evalu - ates whether the merger is likely to lead to higher pric - es, either through the unilateral ability of the merged firm or in co-ordination with other firms. Generally speaking, the prevention or lessening of competition will be considered by the FCCPC to be “substantial” in either of the two following circumstances:
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