The COMESA Competition Commission finally in action: a short look at the first merger notifications

One of the most exciting news this year in the international competition law scene is perhaps the coming into life of a new supranational competition law regime. Earlier this year, on 14 January 2013, the competition law regime of COMESA (Common Market for Eastern and Southern Africa) entered into force. And, a brand new authority, the COMESA Competition Commission (CCC) is entrusted with the enforcement of that regime. This post focuses on the COMESA merger control regime. The new COMESA merger law has been discussed at length here, here and here. It has been said that extensive jurisdictional criteria in the COMESA merger regulations to determine which transactions are notifiable to the CCC, the zero financial threshold and the low local nexus of the merging parties to the COMESA market, may undermine the functioning of the COMESA merger control system. Hopefully, these problems would be fixed by CCC with its incoming Merger Guidelines. However, the aim of this post is to examine merger operations notified to CCC since its inception. It considers which markets are affected by the transactions and whether the parties to the notified merger operations are global or regional market players.
As of today, eight merger operations have been notified to the CCC. Philips/Funai (Merger Notice no.1) is a merger between global multinational undertakings affecting a wide number of national markets, including those of the COMESA Member States. Arguably, this transaction may have not appreciable negative effects on competition in the COMESA. Indeed, the CCC has unconditionally cleared it. Apollo Tyres/Cooper Tire& Rubber Company (Merger Notice no.4) is a merger between global market players. Under its brand Dunlop Apollo sells its products in many African countries, which should meet the low nexus jurisdictional criterion. Total Outre Mer/Shell Marketing Egypt-ShellCompressed Natural Gas Egypt Company (Merger Notice no.3) is between subsidiaries of multinational undertakings with significant operation in COMESA Member States. The CCC approved the planned merger. It took the views that the merger was unlikley to negatively affect competition in the relevant markets due to the low market shares of the partiers. The parties to EurasianResource Group/Eurasian Natural Resource Group merger (Merger Notice no.2) are incorporated respectively in Luxembourg and London. The target firm is a mining and energy undertaking operating in many countries and has a nexus with COMESA in the shape of the operations it conducts in some COMESA member states. PPC International/Cimerwa (Merger Noticeno.5), Omah/Oceanic (Merger Noticeno.6) and Omah/Provident (MergerNotice no.7) all appear to be regional mergers as the parties are operating in African countries. Omah/Oceanic and Omah/Provident affect financial market and, interestingly, only Omah operate in the COMESA regions, whereas the targets Oceanic and  Prudential operate in Nigeria that is a COMESA member state. Omah/Oceanic and Omah/Provident fell within the regulatory jurisdiction of the CCC. According to the guidance given by the CCC in its Draft Merger Assessment Guidelines when the acquiring party operates in two or more Member States and the target does not operate in the COMESA region the transactions has to ne notify to the CCC. The CCC gave the go ahead to the PPC International acquisition of Cimerwa as the merger was found to be unlikely to restrain competition. Finally in Cipla India/Cipla Medpro an India-based producer of generic pharmaceuticals intends to purchase a South African manufacturers of pharmaceutical and veterinary products. The CCC press release does not say anything on the nexus between the merging parties and the COMESA market. In any event, also this transaction was unconditionally authorized by the CCC. 
In conclusion, the CCC has unconditionally authorized four of the eight mergers notified to it, while the other merger cases are still pending. Arguably, due to the far-reaching jurisdctional criteria in the COMESA merger control regime, operations unlikley to have a relevant competition impact on the COMESA market have been cautiously notified to the CCC that approved them without imposing any remedies on the parties.
   

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