NIGERIA Trends and Developments Contributed by: Chinyerugo Ugoji, Tiwalola Osazuwa, Onyinyechi Chima and Edidiong Antai, ǼLEX
tion. For investors seeking activity within the Nigerian market, regulatory strategy has now become a central component of deal planning. Investments and Securities Act 2025: practical implications for public M&A Since its enactment, the Investments and Securities Act 2025 (“ISA 2025”) has clarified and strengthened the statutory framework for public M&A in Nigeria. The Act explicitly brings a wider range of corporate restructuring transactions, including carve-outs, spin- offs, and disposals of assets that materially affect business direction, within SEC oversight, requiring parties to consider regulatory engagement at an ear - lier stage of transaction planning. A key development under ISA 2025 is the migration of several provisions that were previously governed primarily by subsidiary regulations into primary leg - islation. By embedding takeover, merger and control rules directly within the statute, the Act enhances legal certainty and reduces reliance on separate SEC rules, providing a single statutory reference for key takeover and merger provisions. The Act also codifies duties on acquirers and directors to act in good faith and treat all shareholders equita - bly. Disclosure obligations and shareholder participa - tion requirements are now more clearly articulated, strengthening the compliance framework for public company transactions and providing a more coherent basis for deal structuring and execution. Nigeria Tax Act 2025: structuring and cross-border considerations The Nigeria Tax Act 2025 represents one of the most consequential fiscal reforms affecting M&A transac - tions. Its provisions have implications for domestic share transfers, asset disposals and offshore holding structures. A particularly significant development is the expan - sion of Nigerian tax exposure to certain indirect off - shore disposals where substantial value is derived from Nigerian assets. This reform aligns Nigeria more closely with global trends on taxation of indirect trans - fers and reflects an intention by the tax authorities to
capture the economic value linked to Nigerian opera - tions. For cross-border transactions, this means that a sale of shares in a foreign holding company may still attract Nigerian tax consequences if the underlying value is substantially attributable to Nigerian subsidiaries or assets. Buyers and sellers must therefore conduct Nigerian tax analysis even where the transaction is executed outside Nigeria. The Act’s approach to capital gains and asset trans - fers also affects domestic restructurings. Transfers above the tax written-down value may crystallise gains, which in turn influences whether vendors pur - sue share sales or asset carve-outs. For private equity exits, this may materially affect internal rate-of-return calculations and exit structuring decisions. Recapitalisation as a driver of consolidation across finance services The recapitalisation programme introduced by the CBN in 2024 continues to reshape the banking land - scape in 2025. Acting pursuant to its powers under the Banks and Other Financial Institutions Act 2020, the CBN issued directives increasing the minimum paid-up share capital requirements for commercial, merchant and non-interest banks, with differentiated thresholds based on licence category and geographic scope. International commercial banks are now required to maintain a minimum capital of NGN500 billion, nation - al banks NGN200 billion and regional banks NGN50 billion, with compliance required by 31 March 2026. So far, the policy has catalysed capital-raising and strategic consolidation discussions. Institutions that face challenges in meeting capital thresholds may consider strategic mergers, minority investments or business combinations. For potential investors, this creates opportunities but also requires careful naviga - tion of regulatory approvals, including CBN approval for significant shareholding changes, fit-and-proper assessments of proposed shareholders and direc - tors, source-of-funds scrutiny and ongoing reporting obligations.
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