NIGERIA Law and Practice Contributed by: Chiagozie Hilary-Nwokonko and Chukwuyere Ebere Izuogu, Streamsowers & Köhn
resources and staff to operate independently in the relevant market. 2.11 Power of Authorities to Investigate a Transaction Section 95 (3) of the FCCPA authorises the FCCPC to require the parties to a merger that falls below the applicable jurisdictional thresh - olds to notify the Commission of the merger transaction in the prescribed manner and form. This power may be exercised where the FCCPC is of the opinion that the merger may substan - tially prevent or lessen competition. The FCCPC must exercise this power within six months from the date the merger is implemented. 2.12 Requirement for Clearance Before Implementation According to Section 93 (1) of the FCCPA, a pro - posed merger shall not be implemented unless it is first notified to and approved by the FCCPC. Specifically, Regulation 13 (2) of the Merger Review Regulations 2020 (MRR) requires the merging parties to ensure that they take no steps and undertake no activities before and during the notification period that may be deemed co- ordination or integration of their businesses or their competitive conduct in any of the following respects: • the exchange of commercially sensitive infor - mation; • the nature of contractual clauses governing the relationship; and • the activities of the parties before and during the notification of the merger. To do otherwise would increase their risk of engaging in gun-jumping conduct, which could expose them to fines from the FCCPC. Para - graph 3.61 of the MRG cites the following exam - ples of gun-jumping:
• co-ordination between merging parties on prices or terms to be offered to customers for sales prior to closing the merger; • allocating customers for sales to be made prior to closing; and • if, prior to closing, merging firms co-ordinate their negotiations with customers for sales to be made after the merger closes (eg, negotia - tions of long-term contracts). For mergers that do not meet the jurisdictional threshold for notification, which are notified to the FCCPC post-transaction, the merger parties are not required to take further steps to integrate the respective businesses. 2.13 Penalties for the Implementation of a Transaction Before Clearance Under the Federal Competition and Consumer Protection Commission (Administrative Penal - ties) Regulations 2020, the base penalty for gun jumping, ie, implementing a notifiable merger without the FCCPC’s approval, is set at 2% of the turnover of the merger parties in the preced - ing year. The final penalty is calculated by apply - ing a formula that considers several factors, such as the duration of the months in which the gun-jumping persists, the ratio of the aggravat - ing factors and the ratio of the mitigating factors. The FCCPC has consistently reiterated its com - mitment to sanctioning parties that implement qualifying mergers without prior approval. How - ever, to date, there is no public record of penal - ties being imposed on undertakings domiciled in Nigeria for gun jumping. Similarly, there have been no known or publicly disclosed enforce - ment actions or penalties in respect of foreign- to-foreign mergers.
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