Mona El-Garf, the chairperson of the Egyptian Competition Authority (ECA), said the authority seeks to amend the Protection of Competition Law and the Prohibition of Monopolistic Practices Law regarding merging and acquisition deals.
The new amendments will obligate major companies to obtain the approval of the agency before completing any merging or acquisition deals.
The amendments came in the framework of a twinning programme with the EU, most notably Germany and Lithuania.
El-Garf added during a press conference held on Monday that the ECA had communicated with several institutions such as the Federation of Egyptian Industries (FEI) and the Federation of Egyptian Chambers of Commerce, as well as regulatory bodies related to mergers and acquisitions to consult over the amendments.
She stated that the proposed amendments will be reviewed during the next board meeting of the ECA, in preparation to submit it to the Minister of Industry and Trade within a month.
El-Garf pointed out that they understand the companies’ concerns over this amendment, but it is very important for improving the investment climate and the global competitiveness index.
“Egypt is the only country among the Arab and African countries where the protection of competition authority does not control mergers in advance, and it affects Egypt’s position in international indexes, as it occupies the 124th place among 146 countries in terms of efficiency of markets despite its large size.”
She said that the amendments include a number of articles obligating companies not to complete the acquisition deal until they obtain the approval of the ECA, stressing that the authority has not determined yet the size of targeted deals, which are expected to exceed EGP 100m, the current rate in the law. She noted that the proposed amendments require the authority to respond to companies within a certain period of 45 days.
“The size of business must be large enough to affect competition,” she said, adding that this size may be reduced later.
She pointed out that the law obligates companies to notify the authority before completing the deal, and the recent amendments to the law impose sanctions on those who refuse to notify the authority, if their business volume exceeds EGP 100m.
El-Garf pointed out that the authority addressed the Egyptian Financial Supervisory Authority (EFSA) to notify it with all the mergers and acquisitions.
She revealed that several complaints were filed to the authority from some satellite companies about violation in advertising prices; however, the ECA has not proven the problem yet.
The authority has examined 23 cases from July 2016 to 15 May 2017, notably the monopoly case of Qatar’s BeIN Sports channel. The communications, fertilisers, and cement companies topped the list of companies that have been accused of legal violation, while the authority reconciled with four companies after their violations were proven.