NIGERIA Law and Practice Contributed by: Chiagozie Hilary-Nwokonko and Chukwuyere Ebere Izuogu, Streamsowers & Köhn
There are no specific rules for foreign direct investment in relation to merger control. 4.7 Special Consideration for Joint Ventures The same standard applies to the substantive assessment of mergers and the substantive review of joint ventures. At the time of writing, there is no indication as to whether or not the FCCPC will examine possible co-ordination issues between joint venture parents when reviewing a joint venture. 5. Decision: Prohibitions and Remedies 5.1 Authorities’ Ability to Prohibit or Interfere With Transactions Section 98 of the FCCPA authorises the FCCPC to direct any of its officers to investigate a merg - er. In exercising this power, the FCCPC may also require any person or undertaking to provide any information regarding the merger. In addi - tion, Regulation 20 (1) of the MRR authorises the FCCPC to prohibit a merger upon the conclusion of the review process. However, the FCCPC has indicated that only mergers that lessen competition substantially will be prohibited. In assessing whether a merger is likely to prevent or lessen competition substan - tially, the FCCPC evaluates whether the merger is likely to lead to higher prices, either through the unilateral ability of the merged firm or in co- ordination with other firms. Generally speaking, the prevention or lessening of competition will be considered by the FCCPC to be “substantial” in either of the two following circumstances: • where the price of the relevant product(s) would likely be higher in the relevant market
than it would be in the absence of the merger (“material price increase”); or • where sufficient new entry would not occur rapidly enough to prevent a material price increase or counteract the effects of such an increase. Where the merging firms have pre-existing mar - ket power, individually or collectively, the FCCPC will consider smaller impacts on competition resulting from the merger to meet the test of being substantial. 5.2 Parties’ Ability to Negotiate Remedies The FCCPC may apply remedies, or the merger parties may propose remedies, including: • structural remedies, which typically involve the disposal of a business or assets from the merger parties to create a new source of competition (if sold to a new entrant) or to strengthen an existing source of competition (if sold to an existing competitor); • behavioural remedies, non-structural rem - edies or “conduct” remedies, which are ongo - ing measures designed to modify, regulate or constrain the future conduct of the post- merger firm; and/or • hybrid remedies, which are a combination of both structural and behavioural remedies and will be applied by the FCCPC when, for example, a merger involves multiple markets or products and competition is best pre - served by structural relief in some relevant markets and by non-structural relief in others. 5.3 Legal Standard While remedies are not generally required to meet a specific legal standard to be deemed acceptable, the FCCPC must, as a matter of practice, ensure that any proposed remedy is
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