NIGERIA Law and Practice Contributed by: Chiagozie Hilary-Nwokonko and Chukwuyere Ebere Izuogu, Streamsowers & Köhn
6. Ancillary Restraints and Related Transactions 6.1 Clearance Decisions and Separate Notifications Both the FCCPA and the decisional practices of the FCCPC are silent on the concept of ancil - lary restraints. However, according to Regula - tion 13 (2) (b) of the MRR, certain contractual clauses ancillary to the merger transaction may be deemed a co-ordination or integration of the parties’ businesses or their competitive conduct and thus expose them to liability for gun jumping. According to the FCCPC, these clauses demand greater scrutiny during the merger review pro - cess and include the following: • the lack of a precedence clause delineating the effective date of the contract and the date of its execution in relation to the creation of • clauses for full or partial payment of non- reimbursable, earnest money deposit or advance payments, in consideration for the target, except in the case of: (a) customary down payments for business transactions; (b) deposits in escrow accounts; or (c) break-up fees (payable if the transaction is not consummated); • clauses allowing direct interference by either party in the other party’s business strategies by submitting, for example, decisions over prices, customers, business/sales policy, planning, marketing strategies and other sen - sitive decisions (that do not constitute a mere protection against deviation from the normal course of business and, consequently, the protection of the value of the business being sold); and any integration among parties; • prior non-compete clauses;
FCCPC is considered an offence under the Federal Competition and Consumer Protection Commission (Administrative Penalties) Regula - tions 2020. Offenders may face a base penalty of NGN5 million, which can be adjusted based on various factors, such as the duration of the non-compliance and any aggravating or mitigat - Section 97 (1) (b) of the FCCPA requires the FCCPC to issue a decision in the form of a report after considering a merger, stating whether to: • approve the merger; • approve the merger subject to condition(s); or • prohibit the implementation of the merger. Merger review decisions are not made publicly available. As far as is known, there have been no recent cases where the FCCPC has required remedies or prohibited a merger transaction. However, on 4 March 2023, the FCCPC published and invited comments with respect to the remedies package proposed by the merger parties in the proposed acquisition of a 21.61% equity stake by FMDQ Holdings PLC in Central Securities Clearing Systems PLC. The remedies proposed by the merger parties in this case are both behavioural and structural; no information is available on the outcome of this case nor any decision of the FCCPC in this regard. ing circumstances present. 5.6 Issuance of Decisions 5.7 Prohibitions and Remedies for Foreign-to-Foreign Transactions
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