EGYPT Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Hegui Taha and Farida Koura, GLA & Company
subject to the jurisdiction and review of the ECA, provided that the financial thresholds specified under the Egyptian Competition Law are met (see 2.1 Notification with respect to the express
Under Article 2/i of the Egyptian Competition Law, “decisive influence” is defined as the abil - ity to directly or indirectly influence, the policy of another person, including its strategic decisions and/or commercial objectives. “Material influence” is established by any of the following being present. • An act that leads to the ownership of 25% or more of the total voting rights or total shares or stocks of the capital of another person. • An act that leads to the ownership of less than 25% of the total voting rights or total shares or stocks of the capital of another per - son, if it is associated with additional factors that may suggest that the acquirer exercises an influence disproportionate to its sharehold - ing, in particular by: (a) the percentage of voting rights owned by the person compared to the remaining voting rights, which enables the holder to influence the policy of another person, including its strategic decisions or com - mercial objectives; (b) the presence of any provisions in the articles of association, the shareholders’ agreement or any other document that grants the acquirer special rights or veto rights; (c) the existence of common shareholders between the acquirer and the acquired person; and (d) the presence of one or more representa - tives of the acquirer in the board of direc - tors of the acquired person. “Material influence” is not established unless more than 10% of the total voting rights, shares or stocks in the capital in another person is owned, unless the acquirer is ranked among
exceptions under the ECL). 2.4 Definition of “Control”
Article 2/h of the Egyptian Competition Law defines “control” as the ability of one or more controlling persons to exercise decisive influ - ence, directly or indirectly, by directing the eco - nomic decisions of another person or persons, either through acquiring the majority of voting rights, or the ability of the controlling person to block economic decisions by the person or other persons or by any other means. This includes any situation, agreement, stocks or shares own - ership, regardless of their share, provided that it leads to a decisive influence on the management or decision-making. Under the ECL, “control” can be exercised, in particular, through: • an act that leads to the ownership of 50% or more of the total voting rights or total shares or stocks of the capital of another person; • an act that leads to the ownership or the right to use and exploit all or the majority of the assets of another person; • an act that leads to the acquisition of rights, which confer the ability to the controlling per - son to appoint the majority of the members of the board of directors or “control” the deci - sions of the board of directors or the general assembly meetings; and • an act that leads to more than half of the members of the board of directors or the members of the general assembly meetings being the same persons in the acquiring per - son and the acquired person.
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