SENEGAL Law and Practice Contributed by: Khaled Abou El Houda, Malick Lo, Chadi Safieddine and Mohamed Kamil, SCP Houda & Associés
Purchase of Shares This method involves acquiring all or part of the target company’s capital. It allows the buyer to gain control of the business directly. Transactions typically require shareholder agreements, thorough due diligence, and negotiation of the share price. One key advantage is maintaining the company’s existing legal structure, including its contracts and licenses. This method is governed by the Uniform Act on the Law of commer - cial companies and economic interest groups. Merger or Absorption Two companies may combine through a merger or absorption, consolidating their assets under a single legal entity. This method is suitable for rapid growth or sector consolidation and is governed by the Uni - form Act on the Law of commercial companies and economic interest groups. Joint Ventures and Strategic Partnerships An acquirer can form a joint venture with the tar - get company, contributing capital or expertise in exchange for a stake. This allows testing the market before full control and sharing risks with a local part - ner. In Senegal, there is no specific legal framework governing joint ventures; such arrangements are fully subject to the parties’ contractual freedom, meaning the terms, governance, and structure are negotiated and agreed upon between the partners. Asset Purchase The acquisition focuses on specific assets, such as property, equipment, patents, inventory, or contracts. This approach allows the buyer to select only desired assets while limiting exposure to unknown liabilities. It requires detailed asset purchase agreements, and often the consent of third parties, including creditors or clients. This method is governed by the Uniform Act on the Law of commercial companies and economic interest groups and the Uniform Act on General Com - mercial Law. 2.2 Primary Regulators The Rise of ECOWAS Oversight The ECOWAS Regional Competition Authority (ERCA) has effectively become the primary regulator for merg - er control in Senegal since becoming fully operational in late 2024. It now functions as a “one-stop shop”
for transactions meeting specific regional turnover or asset thresholds. This supranational mandate ensures that mergers with a regional dimension are evaluated through a single, unified procedure across West Africa. Sector-Specific Regulators In addition to general competition rules, certain stra - tegic industries are subject to oversight by specialised national bodies. For example, the Ministry of Petro - leum and Energies plays a decisive role in approving transfers of interests or licenses. 2.3 Restrictions on Foreign Investments Principle of Openness Under Regulation No 06/2024/CM/UEMOA on Exter - nal Financial Relations, the constitution of foreign direct investment or portfolio investment in a UEMOA member state is in principle free, provided that a dec - laration for statistical purposes to both the Ministry of Finance and the BCEAO is made. Declarations are submitted in writing, typically as a formal letter, without requiring prior approval or authorisation. The process ensures transparency and allows the BCEAO to monitor cross-border flows, but it does not limit the investor’s freedom to invest. Senegal maintains a policy of openness toward for - eign direct investment, a principle reaffirmed by the adoption of the 2025 Investment Code. Under this framework, foreign investors generally enjoy the same rights as local companies, including the freedom to acquire property and transfer capital. Most sectors are fully open to 100% foreign ownership without prior systematic screening or discriminatory barriers. Local Content in Strategic Sectors Despite this general openness, the energy sector is subject to strict “Local Content” requirements. Com - panies operating in oil and gas must prioritise Sen - egalese providers and, in many cases, open their shareholding to local investors or form partnerships with national entities. These regulations aim to ensure that the domestic economy benefits directly from the country’s recent transition into a major hydrocarbon producer.
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