According to Competition and Fair Trading Act (CFTA) a merger means  (a) the acquisition of a controlling interest in—(i) any trade involved in the production or distribution of any goods or services; (ii) an asset which is or may be utilized for or in connection with the production or distribution of any commodity, where the person who acquires the controlling interest already has a controlling interest in any undertaking involved in the production or distribution of the same goods or services; or (b) the acquisition of a controlling interest in any trade whose business consists wholly or substantially in— (i) supplying goods or services to the person who acquires the controlling interest; (ii) distributing goods or services produced by the person who acquires the controlling interest.

Controlling interest, in relation to— (a) any undertaking means any interest which enables the holder thereof to exercise, directly or indirectly, any control whatsoever over the activities or assets of the undertaking; (b) any asset, means any interest which enables the holder thereof to exercise, directly or indirectly, any control whatsoever over the asset.

Mergers and acquisitions are regulated under Competition and Fair Trading Act (1998). There are also Competition and Fair Trading Act Regulations (2006) and Merger Guidelines that provide more details and guide the merger assessment processes.

Any person may apply to the Commission for an order authorizing that person to effect a merger or takeover.

The CFTA does not provide for thresholds for a merger to be notified before the Commission.

You are expected to fill a merger application form, which you are expected to submit together with covering letter and statement of accounts.

Merger application fees are calculated as 0.05% of the combined annual turnover or assets, whichever is higher.

Joint ventures are not notifiable under CFTA

Upon submitting the application and payment of merger application fees, the Commission will take not more than 45 days to approve your merger.

If that happens, the Commission issues an interim order or comfort letter depending on the findings of the assessments.

Section 11 of CFTA provides for public hearings on any matters including mergers and acquisitions.

• CFTC handles all mergers whose parties are domiciled in Malawi only, and they do not operate in other COMESA member states;
• CCC handles all mergers whose parties operate in more than two COMESA member states, and meet their merger notification thresholds according to their notification thresholds.

You do not need to notify that merger. However, if the acquired stake will give you control over the target, you will be required to notify that merger.

Section 35 of CFTA provides that (1) Any person who, in the absence of authority from the Commission, whether as a principal or agent and whether by himself or his agent, participates in effecting— (a) a merger between two or more independent enterprises; (b) a takeover of one or more such enterprises by another enterprise, or by a person who control another such enterprise, where such a merger or takeover is likely to result in substantial lessening of competition in any market shall be guilty of an offence. (2) No merger or takeover made in contravention to subsection (1) shall have any legal effect and no rights or obligations imposed on the participating parties by any agreement in respect of the merger or takeover shall be legally enforceable.

The Commission considers the effect of the merger on competition and the economy in general. The Commission also considers the public concerns. Some of the economic and public concern factors the Commission considers include effect on production or distribution efficiencies, consumer prices, exports, technological advancement, employment and economic growth.

If the target company operates in a market where you do not have any linkages whatsoever, you are requested to still notify the merger to establish the claim that you do not have linkages to the target or any other market. This is notified under negative clearance.

This is the procedure whereby the Commission issues a decision at the request of an undertaking indicating that the Commission does not consider that a given proposal is prohibited by the CFTA. The applicant also fills a designated form.

Seven Hundred Thousand Kwacha (MK700,000.00), and the fees are subject to revision from time to time.

Competition assessment is a reserve for the Commission. You should still apply for authorization despite your observations because apart from competition effects, the Commission considers other factors before authorizing a merger.

The transaction is notifiable before the Commission but under negative clearance.

No, it is not notifiable.

The Commission or any person in whose favour or for whose benefit an order has been made may lodge a copy of the order, certified by the Commission or a person authorized by the Commission, with the Registrar of the High Court and the Registrar shall forthwith record the order as a judgement of the High Court.

Any person who is aggrieved by a finding of the Commission may, within fifteen days after the date of that finding, appeal to a Judge in Chambers.