EGYPT Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Hegui Taha and Farida Koura, GLA & Company
2. Jurisdiction 2.1 Notification
A fine of between EGP30 million and EGP500 million will be imposed. While the penalty framework is established under the ECL, as of May 2025, the ECA has not yet publicly enforced fines for merger notifi - cation failures. 2.3 Types of Transactions The Egyptian Competition Law uses a general principle of “economic concentration” to identify merger control issues. The ECL defines an ”eco - nomic concentration” as any change of control or material influence over one or more persons. It expressly identifies the following transactions as “economic concentrations”. • Mergers. One person ceases to exist as a separate legal entity as per its absorption by another person, which retains its legal per - sonality after the merger (merger by absorp - tion) or two or more persons cease to exist as separate legal entities as they are integrated into a newly created legal entity (merger by integration) • Acquisition. Acquisition by one or more persons, directly or indirectly, of control or material influence over the whole or part of another person whether by contract, pur - chase of securities or assets or by any other means, and the acquisition can be individual or collective. • Joint venture. Establishment of a joint ven - ture or the acquisition of an existing person by two or more persons for the purpose of establishing a joint venture that conducts economic activity independently and perma - nently. However, if the acquisition of the non-control - ling minority shareholdings leads to a change in material influence over another person, it will be
In the event a transaction falls under the scope of an “economic concentration” under the ECL, notification is compulsory. Under the second paragraph of Article 2/g of the Egyptian Competition Law, the following trans - actions will not be considered an “economic concentration”. • Temporary acquisition, by any securities company, of securities in a party for the pur - pose of resale within one year from the date of the acquisition, provided that they do not exercise any voting right nor take any meas - ures that would affect the strategic decisions or commercial objectives of the acquired party. The ECA may extend this period, upon request, if the acquirer proves that the resale of the securities was not possible within one year as determined by the Executive Regula - tions. • An acquisition or merger between related parties. This is considered an internal restruc - turing and does not trigger an obligation to notify unless there is a direct or indirect change in control or material influence. 2.2 Failure to Notify Failure to abide by the notification requirement set out in Articles 19 bis a and 19 bis e of the Egyptian Competition Law will be sanctioned by a fine of between 1% and 10% of the total annual turnover, asset value or transaction value (whichever is higher according to the final audit - ed consolidated financial statements). The Egyptian Competition Law and Amend - ments also set out the penalties to be imposed if a calculation of these percentages is impossible.
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