EGYPT Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Hegui Taha and Farida Koura, GLA & Company
• The acquiring person(s), in the case of an acquisition that leads to sole or joint “con - trol” or ”material influence” over one or more persons. • The merged persons in the case of a merger. • The acquiring persons in the case of an acquisition for the purpose of establishing a joint venture. • The persons establishing a joint venture. 2.8 Foreign-to-Foreign Transactions Foreign-to-foreign transactions are subject to the ECL, Amendments and Executive Regula - tions. In the event foreign-to-foreign transac - tions fall under the definition of “economic concentrations” and meet any of the Financial Thresholds set out in Article 19 bis of the Egyp - tian Competition Law then it is compulsory for parties to file a notification prior to closing (see 2.5 Jurisdictional Thresholds ). 2.9 Market Share Jurisdictional Threshold No market share jurisdictional thresholds are specified under the merger control regime. The Amendments and the Executive Regulations specify that national and international as well as combined and individual annual turnover of the parties involved in the transaction are applicable. 2.10 Joint Ventures The Egyptian Competition Law does not expressly use the term “full-function joint ven - ture” in its provisions. However, it does expressly apply these principles to distinguish between a ”full-function joint venture” and a non-full-func - tion joint venture (a “full-function joint venture” will be notifiable to the ECA. The ECA does expressly use the term ”full-function joint ven - ture” in its Guidelines.
Under the Egyptian Competition Law and Exec - utive Regulations, joint ventures are notifiable to the ECA, if they meet the following conditions. • Two or more persons must jointly “control” the joint venture, either as a result of estab - lishment or acquisition. • The joint venture must be intended to perma - nently operate. • The joint venture must be intended to perform all functions carried out by independent per - sons operating in the same market, particu - larly through the presence of an independent management dedicated to handling the daily operations of the joint venture and having separate resources specific to the person, including financing, employees and assets. In this context, independence means that the joint venture must be autonomous from an operational perspective. In order to consider the operational autonomy of a joint venture, the following factors should be met. • The joint venture must engage in an econom - ic activity beyond performing one specific function of its controlling persons. The joint venture must also be prepared to perform all functions carried out by independent persons operating in the relevant market. For example, if the controlling persons are active in produc - tion, the joint venture’s activity should be the production of a new product different from those produced by the controlling persons. If the joint venture is set up to perform R&D activities solely for the interest of its control - ling persons, without the involvement of any other persons operating in the market, the joint venture will not be considered independ - ent according to the Egyptian Competition Law.
170 CHAMBERS.COM
Powered by FlippingBook