BALOGUNHAROLD

Case 16Merger clearance in Nigeria

Unconditional merger clearance, and a new approach to calculating turnover.

A South African power and infrastructure conglomerate needed Nigerian clearance for a strategic, multi-jurisdiction acquisition. We obtained it unconditionally, and persuaded the regulator to calculate turnover in a way that avoided double-counting.

Client
South African power and infrastructure conglomerate (confidential)
Sector
Power & infrastructure
Practice
Competition
Jurisdiction
Nigeria (within a multi-jurisdiction clearance)

The brief

Our client, a South African power and infrastructure conglomerate, was making a strategic acquisition that required merger clearance in several jurisdictions, including Nigeria. We handled the Nigerian merger-clearance process before the Federal Competition and Consumer Protection Commission (FCCPC).

Obtaining clearance was the baseline. The more consequential question was how the parties’ relevant turnover should be calculated. The method affects whether a transaction is notifiable and, directly, the merger-notification fee payable to the FCCPC.

We set out our analysis in March 2023, in our published insight “Turnover and Control Considerations for Merger Clearance in Nigeria.”

Our advice

  1. 01

    IFRS 10 turnover

    Persuading the FCCPC to accept an IFRS 10 (consolidated financial statements) approach to calculating relevant turnover, avoiding double-counting in the turnover calculation.

  2. 02

    Notification fees

    Because the fee follows turnover, the accepted approach had a direct effect on the amount payable to the FCCPC as merger-notification fees.

  3. 03

    Control analysis

    Analysing which entities fell within the acquiring and target groups, and how control should be assessed for the notification.

  4. 04

    Notification and engagement

    Preparing the Nigerian notification and managing engagement with the FCCPC through to its decision.

  5. 05

    Multi-jurisdiction coordination

    Aligning the Nigerian filing with the clearance processes running in the other jurisdictions the transaction required.

Outcome

Balogun Harold obtained an unconditional merger clearance on this transaction, which required merger clearance across multiple jurisdictions. The FCCPC accepted our IFRS 10 approach to relevant turnover, avoiding double-counting and reducing the notification fee accordingly.