ETHIOPIA Law and Practice Contributed by: Getu Shiferaw, Mehrteab Leul, Michael Sebsibe and Debora Belachew, Mehrteab & Getu Advocates LLP (MLA)
regulations of COMESA provide a comprehensive framework for regulating mergers within that market. The filing threshold for COMESA is fulfilment of the following requirements: • at least two of the merging parties must have operations in two or more COMESA member states; and • each must have an annual turnover or asset value of at least USD10 million in the COMESA region. 2.3 Restrictions on Foreign Investments There are areas of investment in Ethiopia that are part - ly or fully restricted for foreign investors, such that investments can only be made jointly, with a domes - tic investor or with the government of Ethiopia, or by a domestic investor only. However, since Ethiopian law follows a negative listing approach in relation to foreign investment, any sector that has not been expressly reserved to any of the categories is open for foreign investors. Some changes have been introduced in the past few months. The Ethiopian Investment Board has issued a new directive that has lifted restrictions on engage - ment in areas of investment that were previously reserved for domestic investors, namely:
• Financial Consumer Protection Directive No FCP/01/2020; • Telecommunications Competition Directive No 798/2021 and • the 1960 Civil Code of Ethiopia. The Ethiopian competition laws require that any busi - ness entity that proposes to enter into a merger agree - ment, and meets the minimum thresholds, should first give notice to the relevant authority by providing all the necessary information. MoTRI has a department that specifically deals with the approval of mergers before they come into effect. MoTRI investigates merger applications from the per - spective of anti-trust legislations and will examine the possible adverse effects that the proposed merger may have on trade competition. Merger approval will be granted only if the relevant authority is of the opin - ion that the merger will not have any adverse effect on trade competition. If MoTRI is of the opinion that the merger may pose adverse effects but believes that these effects may be obviated by complying with cer - tain conditions, then it could approve the merger with the necessary requirements attached as a condition. For states that are members of COMESA, and if the merger is cross-border in nature within COMESA, the COMESA Competition Regulations will be applicable provided that the activity falls within this jurisdiction. This legislation was adopted to regulate anti-compet - itive practices within the region. 2.5 Labour Law Regulations The primary labour law that applies to M&A transac - tions is Labour Proclamation No 1156/2029. According to Ethiopian labour law, the amalgamation, division or transfer of ownership of an undertaking will not have the effect of modifying a contract of employ - ment. The existing terms of the contract of employ - ment that the employees entered into will continue to have effect under the acquirer, unless the contract has been modified in line with a new contract of employ - ment, collective agreement or any written agreement of the parties.
• export trade; • import trade; • wholesale trade; and • retail trade.
Foreign investors can now engage in these areas of investment provided that they meet the minimum thresholds provided under the law for each sector. 2.4 Antitrust Regulations In Ethiopia, the antitrust regulations that apply to M&A are: • Trade Competition and Consumers Protection Proclamation No 813/2013; • FDRE Trade Competition and Consumer Protection Merger Directive No 1/2008; • the COMESA Competition Regulations; • the 2021 Commercial Code of Ethiopia;
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