SENEGAL Law and Practice Contributed by: Khaled Abou El Houda, Malick Lo, Chadi Safieddine and Mohamed Kamil, SCP Houda & Associés
6.2 Mandatory Offer Threshold Private Companies (Non-Listed)
prohibit such recording of general terms (price, time - table, conditions precedent). Contractual Freedom Versus Regulatory Constraints While the principle of freedom of contract allow par - ties to structure the deal through binding agreements, this freedom is supervised in the context of listed companies. • Listed companies (BRVM) The terms agreed upon must comply with the AMF-UMOA General Regu - lation. Once a definitive agreement is signed, the “Permanent Information” rule triggers immediate disclosure if the information is precise and likely to impact the share price. • Irrevocability Under regional market rules, once an offer is filed with the AMF-UMOA, it becomes generally irrevocable. Therefore, any “conditions precedent” included in the definitive agreement must be clear, objective, and compliant with the regulator’s requirements to avoid being deemed void. 6. Structuring 6.1 Length of Process for Acquisition/Sale Absence of Statutory Duration There is no legally mandated timeframe for the overall process of acquiring or selling a business in Senegal. The duration of a transaction is primarily determined by the complexity of the target’s operations, the depth of the due diligence required, and the pace of negotia - tions between the parties. Impact of Regulatory Approvals The most significant factor affecting the timeline is the requirement for regulatory clearances. Since the ECO - WAS Regional Competition Authority (ERCA) became fully operational, merger notifications for large-scale deals typically require a review period of 60 to 90 days, which can be extended if the authority requests additional information. Furthermore, in regulated sec - tors, obtaining mandatory prior authorisations from the relevant ministry can add several months to the conditions precedent phase.
For private companies governed strictly by the OHA - DA Uniform Act (AUSCGIE), there is no mandatory offer threshold defined by law. • Contractual nature In the absence of a listing, a change of majority control does not automati - cally trigger an obligation to buy out the remaining shareholders. • Exceptions Such obligations only exist if they have been specifically negotiated and included in the company’s articles of association or a sharehold - ers’ agreement (eg, through tag-along clauses). 6.3 Consideration Predominance of Cash Consideration Cash remains the most commonly used consideration for M&A transactions in Senegal. This preference is driven by its simplicity and the immediate liquidity it provides to sellers, as well as the relative complexity of valuing and transferring shares in private compa - nies under the OHADA Uniform Act. Earn-Outs and Price Adjustment Mechanisms In industries characterised by high valuation uncer - tainty, parties increasingly rely on earn-outs. These clauses allow a portion of the purchase price to be deferred and made contingent upon the target reaching specific financial or operational milestones (eg, EBITDA targets). Locked-box and completion accounts mechanisms are also standard tools used to manage value leakage between signing and closing dates, providing a clear framework for price adjust - ments based on actual net debt or working capital at the time of transfer. Escrow Accounts and Vendor Loans To further bridge value gaps and secure potential indemnity claims, the use of escrow accounts (often held by local or regional commercial banks) has become a market standard. A fraction of the price is held in escrow for a defined period (usually 12 to 24 months) to cover warranties and indemnities (W&I) risks.
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