NIGERIA Law and Practice Contributed by: Chiagozie Hilary-Nwokonko and Chukwuyere Ebere Izuogu, Streamsowers & Köhn
qualifying merger transactions are notifiable to NCC: • the acquisition of more than 10% of the shares of a communications licensee; • a transaction that results in a change of con - trol of a communications licensee; and • a direct or indirect transfer or acquisition of an individual communications licence. 2.2 Failure to Notify Notifying a qualifying merger transaction is a legal requirement under Section 96 (7) of the FCCPA. Failing to do so is considered an offence and may result in a fine of up to 10% of the parties’ turnover from the business year prior to the offence. The court may also determine a dif - ferent percentage based on the case’s specific circumstances. In the communications sector, a failure to obtain the written consent of the NCC when transfer - ring or assigning a communications licence is an offence under the Nigerian Communications (Enforcement Processes, etc) Regulations 2019. Convicted offenders are liable to a fine of NGN10 million and a further NGN500,000 per day, cal - culated from the effective date of the transfer or assignment as determined by the NCC and pay - able for as long as the contravention persists. The NCC may impose a maximum lump sum fee of NGN2 million on licensees with a turnover of less than NGN1 billion. Where a joint venture or change in shareholding structure in a commu - nications licensee is implemented without first obtaining the consent of the NCC, the offending licensees are liable to a fine of NGN5 million and a further NGN500,000 per day, calculated from the effective date of the joint venture arrange - ment or change in shareholding structure, as determined by the NCC, and payable for as long as the contravention persists.
However, the NCC normally publishes details of its enforcement activities regarding a failure to notify a qualifying merger in the communications sector. As far as is known, the FCCPC has not applied such a penalty in practice or made it public in any case. 2.3 Types of Transactions Paragraph 2.6 of the MRG states that the follow - ing transactions are subject to a merger review. • Acquisitions of property within Nigeria are covered by virtue of Section 92 (1) of the FCCPA, including (but not limited to): (a) shares in Nigerian companies, wherever the transaction is entered into, as the shares are domestically situated; (b) domestic businesses; (c) local intellectual property such as trade marks, patents and copyright; and (d) local plant and equipment. • Acquisitions of property, wherever situated, are covered by virtue of Sections 92 (1) and 2 (1)-(3) of the FCCPA if the acquirer: (a) is incorporated in Nigeria; (b) carries on business in Nigeria; (c) is a Nigerian citizen; or (d) is ordinarily resident in Nigeria. If the above points do not apply, acquisitions of a controlling interest (presumably shares in almost all cases) in a corporate body where that body has a controlling interest in a corporation are covered by Section 92 (1) of the FCCPA. According to the FCCPC, an internal restructur - ing within a group of companies does not con - stitute a relevant merger situation and is thus exempt from notification because it does not lead to control by an external party.
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