UGANDA Law and Practice Contributed by: Arnold Lule Sekiwano, Ritah Nakalema, Evelyn Maria Nakigudde and Collette Melvina Awano, Engoru, Mutebi Advocates
• acquires a company that holds effective control in the listed company or together with the voting rights already held by an associated person or related company, resulting in acquiring effective control; or • acquires any shareholding of 20% or more in a subsidiary of a listed company that has contributed 50% or more of the average annual turnover in the latest three financial years of the listed company preceding the acquisition. The relevant notifications and approvals to and from the CMA must be sought for the transaction to pro - ceed, and the necessary corporate and sector regula - tory approvals, if required, must be obtained in order to consummate the transaction. 2.2 Primary Regulators The primary regulators of M&A activity in Uganda are: • the Ministry of Trade, Industry and Cooperatives (“the Ministry”), which is responsible for overseeing mergers, joint ventures, acquisitions and antitrust matters under the framework of the Competition Act, Cap 66 (“the Competition Act”); • the CMA, which regulates M&A activity concern - ing companies listed on the USE and their sub - sidiaries, including entities licensed by it such as brokers, fund managers, securities exchanges and dealers; • the USE, which is the primary platform for listing and trading companies in Uganda’s stock mar - ket. The USE falls under the regulatory purview of the CMA and serves as the principal marketplace where companies can raise capital through debt and equity issuances. The USE is a demutualised exchange and is self-regulating; • ALTX Uganda, which is licensed by the CMA and serves as a complementary trading platform to the USE, particularly for retail investors, institutional traders and high-frequency trading participants. In order to list on either market segment, companies must meet the listing requirements set out in the ALTX Securities Rules v2.0, Book 1 and Book 3; • the COMESA Competition and Consumer Com - mission, which regulates M&A transactions with a regional dimension. A transaction is deemed to be of a regional dimension in circumstances where
either or both of the parties to a proposed transac - tion operate in two or more member states; and • the East African Competition Commission (EACC), which regulates M&A transactions that have a cross-border effect within the EAC common mar - ket. This means that the transaction must impact competition in more than one EAC member state. The EACC has extraterritorial jurisdiction over activities that occur outside the EAC if those activi - ties have an impact on competition within the EAC common market. There are specific sector-related rules that apply to M&A transactions. The Financial Institutions Act, Cap 57, has provisions which govern the amalgamations and arrangements for the transfer of all of the assets and liabilities of a financial institution to another per - son. The Uganda Communications Act, Cap 103, reg - ulates the acquisition of entities, mergers and takeo - vers in the telecommunications sector. The Petroleum Supply Act, Cap 163, requires that the prior approval of the Commissioner for Petroleum be obtained before any transfer of a permit or licence in a regulated com - pany. This would apply in cases where the structure of the M&A transaction culminates in a transfer of a per - mit or licence. The Insurance Act, Cap 191, governs the amalgamation and transfer of insurance business. These laws require the approval and/or notification of the relevant sector regulator in respect to the pro - posed M&A transaction in the industry. The oil and gas laws, particularly in the midstream and upstream sectors, also stipulate local content requirements that may apply to an acquirer. 2.3 Restrictions on Foreign Investments Under the Financial Institutions (Ownership and Con - trol) Regulations, no individual or corporate entity, with the exception of licensed financial institutions, the Government of Uganda, foreign governments, state-owned enterprises, foreign financial institutions licensed in their respective jurisdictions and non- operating holding companies approved by the Bank of Uganda, may own more than 49% of the share capital in a Ugandan financial institution. In the oil and gas industry, the Petroleum (Explora - tion, Development and Production) (National Content) Regulations require a licensee, its contractors and its
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