NIGERIA Law and Practice Contributed by: Chiagozie Hilary-Nwokonko, Chukwuyere Ebere Izuogu and Priscilla Bidemi Ben-Okoh, Streamsowers & Köhn
5.5 Conditions and Timing for Divestitures There is no prescribed timeline for the implementation of remedies according to the decisional practice of the Commission. However, when approving a rem - edies package, the FCCPC may stipulate specific timeframes for implementing the remedies to address identified competition concerns. In certain cases, the merger may be completed prior to the implementation of the remedies, particularly where the remedy is post- approval in nature. In such instances, the FCCPC will, as a matter of practice, require the merging parties or the post-merger entity to provide an undertaking to implement the remedy as a condition for approval. There is no specific penalty for failing to implement an approved remedy; however, non-compliance with any order or directive of the FCCPC is considered an offence under the Federal Competition and Con - sumer Protection Commission (Administrative Penal - ties) Regulations 2020. Offenders may face a base penalty of NGN5 million, which can be adjusted based on various factors, such as the duration of the non- compliance and any aggravating or mitigating circum - stances present. 5.6 Issuance of Decisions Section 97 (1) (b) of the FCCPA requires the FCCPC to issue a decision in the form of a report after consider - ing a merger, stating whether to: • approve the merger; • approve the merger subject to condition(s); or • prohibit the implementation of the merger. Merger review decisions are not made publicly avail - able. 5.7 Prohibitions and Remedies for Foreign-to- Foreign Transactions As far as is publicly known, there have been no recent cases where the FCCPC has required remedies or prohibited a merger transaction. However, on 4 March 2023, the FCCPC published and invited comments with respect to the remedies package proposed by the merger parties in the proposed acquisition of a 21.61% equity stake by FMDQ Holdings PLC in Cen - tral Securities Clearing Systems PLC. The remedies proposed by the merger parties in this case are both
behavioural and structural; no information is available on the outcome of this case nor any decision of the FCCPC in this regard. 6. Ancillary Restraints and Related Transactions 6.1 Clearance Decisions and Separate Notifications Both the FCCPA and the decisional practices of the FCCPC are silent on the concept of ancillary restraints. However, according to Regulation 13 (2) (b) of the MRR, certain contractual clauses ancillary to the merger transaction may be deemed a co-ordi - nation or integration of the parties’ businesses or their competitive conduct and thus expose them to liabil - ity for gun jumping. According to the FCCPC, these clauses demand greater scrutiny during the merger review process and include the following: • the lack of a precedence clause delineating the effective date of the contract and the date of its execution in relation to the creation of any integra - tion among parties; • prior non-compete clauses; • clauses for full or partial payment of non-reimburs - able, earnest money deposit or advance payments, in consideration for the target, except in the case of: (a) customary down payments for business trans - actions; (b) deposits in escrow accounts; or (c) break-up fees (payable if the transaction is not consummated); • clauses allowing direct interference by either party in the other party’s business strategies by submit - ting, for example, decisions over prices, custom - ers, business/sales policy, planning, marketing strategies and other sensitive decisions (that do not constitute a mere protection against deviation from the normal course of business and, conse - quently, the protection of the value of the business being sold); and • in general terms, any clause providing for activities that cannot be reversed at a later time or which implies the expenditure of a significant amount of resources by the agents involved or the authority.
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