The competition authorities in Mozambique and Nigeria recently published revised merger filing fees, which suggest they have considered feedback from various stakeholders
Merger filings across Africa are becoming increasingly important as more competition authorities become fully operational and play a key role in assessing the competitive impact of transactions in various jurisdictions. Merger filing requirements, including filing fees, may influence strategic decisions on how deals should be structured and negotiated between the merger parties.
The competition authorities in Mozambique and Nigeria have recently amended their merger filing fees. Both competition authorities are relatively new. The Federal Competition and Consumer Protection Commission (FCCPC) in Nigeria became fully operational over the past two years. The Competition Regulatory Authority (CRA) in Mozambique began operations last year. We welcome these recent filing fee changes, which suggest that the authorities considered feedback from various stakeholders. For example, the CRA significantly reduced its filing fee from 5% to 0.11% of merger parties' turnover, aligning with best practices throughout Africa.
Mozambique – key changes to note
Ministerial Decree No. 77/2021, dated 16 August 2021 (the Decree), amends the merger filing fees applicable in Mozambique. The CRA has recently become fully operational. Until this amendment, widespread concern was expressed about the exorbitantly high filing fee of 5% of the merger parties' turnover.
The Decree now provides that the applicable filing fee is 0.11% of the turnover in the year before filing, with a maximum limit of 2.25 million meticals (approximately ZAR 527,000). Although the Decree does not explicitly state that the fee applies to the merger parties' turnover in Mozambique, we expect this will be the correct approach and will become established practice once merger parties begin submitting merger filings to the authority.
Nigeria – key changes to note
On 2 August 2021, Merger Review (Amended) Regulations 2021 (the new Filing Fee Regulations) were published. The new fees are set out in the table below:
| |
Threshold |
Fees (consideration of transaction) |
Fees (last combined annual turnover) |
| 1 | First N500 million (approximately ZAR18 million) | 0.45% | 0.45% |
2
| Next N500 million | 0.40% | 0.40% |
3
| Any sum thereafter | 0.35% | 0.35% |
The applicable fees for the merger filing will be a sum of either (i) the relevant percentages relating to the transaction consideration or (ii) the relevant percentages in respect of the parties' prior-year Nigerian turnover, whichever is higher. Although the new Filing Fee Regulations set out slightly higher percentages overall, we welcome that the percentage applicable to the third threshold test based on annual turnover has dropped from 0.75% to 0.35%, since many transactions are likely to fall within this category.
We also welcome that the new Filing Fee Regulations expressly clarify that the relevant turnover for calculating the applicable fees for mergers involving foreign entities with a local component is their Nigerian turnover. Previously, it was unclear whether the filing fee calculation should be limited to Nigerian turnover only. The relevant turnover applicable to private investment entities has also been clarified.
The fees are based on the merger thresholds. If the combined turnover of the merger parties is above N1 billion (approximately ZAR36 million) or the target's turnover is above N500 million, a merger filing must be submitted to the FCCPC.
In addition to these fees, an additional fee of N50,000 (approximately ZAR1,800) is payable. There are also fees for the expedited procedure service (N10,000,000) and negative clearance applications (N2,500,000).
