NIGERIA Law and Practice Contributed by: Chiagozie Hilary-Nwokonko and Chukwuyere Ebere Izuogu, Streamsowers & Köhn
4.6 Non-Competition Issues Non-competition issues are taken into account by the FCCPC during the review process. Spe - cifically, the following non-competition issues are considered in applicable circumstances when reviewing a merger. • Public interest gains, which must be sub - stantial and specific to the merger. In addi - tion, public interest considerations must be assessed under any of the following grounds: (a) gains relating to a particular industrial sector or region – eg, the stable supply of electricity; (b) employment; (c) the ability of national industries to com - pete in international markets; and (d) the ability of small and medium-sized enterprises to become competitive. • The firm is failing, which can be used to justify the approval of an otherwise anti-competitive merger where one of the merging firms is in financial difficulties or at risk of bankruptcy. • According to the FCCPC, the following conditions must be cumulatively met for the defence of a failing firm to be successfully invoked: (a) the firm must be unable to meet its finan - cial obligations in the near future; (b) there must be no viable prospect of reor - ganising the business through the pro - cess of receivership or otherwise; (c) the assets of the failing firm would exit the relevant market in the absence of a merger transaction; and (d) there is no credible, less anti-competitive alternative outcome than the merger in question. The analytical framework adopted by the FCCPC for assessing these defences is set out in the MRG.
the rivalry between them, allowing the merged firm to raise prices profitably; • co-ordinated effects in either a horizontal or non-horizontal merger that enables or increases the ability for several firms within the market (including the merged firm) jointly to increase prices because it creates or strengthens the conditions under which they can co-ordinate; and • vertical or conglomerate effects that may arise principally in a non-horizontal merger that creates or strengthens the ability of the merged firm to use its market power in at least one of the markets, thus reducing com - petition. The FCCPC’s approach to the assessment of these harms is set out in the MRG. The CBN and NCC may recognise these same theories of anti-competitive harm. 4.5 Economic Efficiencies The FCCPC considers economic efficiencies in circumstances where a merger has been deter - mined to be capable of an SPLC situation. In such cases, economic efficiencies would be considered as a trade-off evaluated against the perceived anti-competitive effects of the merger. Such economic efficiencies must result in the better utilisation of existing assets, enabling the combined firm to achieve lower costs than either firm could have achieved alone. According to the FCCPC, the party relying on efficiencies must prove that the efficiencies are: • likely to occur; • merger-specific; and • greater than the anti-competitive effects of the proposed merger, which they will offset.
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