Egypt's landmark rules on pre-merger control under the Egyptian Competition Law (ELC) will enter into force next June, chairman of the Egyptian Competition Authority (ECA) confirmed on Sunday. Under the new rules, a transaction which constitutes an economic concentration (EC) and entails certain financial thresholds set by the Amendment Law will require the pre-closing approval of the ECA. The ER amendments entail specific criteria regarding the definition of ECs and clarify the method of calculating the financial thresholds. For the ECs, they are defined by the Law as any change of control or material influence in a person(s) as a result of a merger, acquisition, or the establishment of a joint venture. During a press conference in Cairo, ECA Chairman Mahmoud Momtaz said the new rules aim to protect market competitiveness, ensure inflows of new investments and the country's economic development, and assist in the growth of the small and medium-sized businesses (SMEs). By enforcing the new rules, Momtaz expects an improvement in the Egyptian economy's global competition rankings. Egypt is among 12 countries out of 40 with a transaction inspection duration taking place between 60 to 90 working days, the ECA chairman said. Elsewhere, some other countries such as Brazil, India, and Turkey, the inspection lasts for more than 150 days, he added. In December 2022, Egypt enacted amendments to some provisions of the Law number 3 of 2005 on the Protection of Competition and the Prohibition of Monopolistic Practices (Egyptian Competition Law). The amendments consist of the introduction of the first Egyptian pre-merger control regime (EMCR). The new amendments included transforming the country's merger control regime from a post-closing notification system to a pre-merger filing system. Formerly, the Egyptian Competition Law had only a post-merger notification system which did not give the ECA any powers to assess, approve, or block a transaction. Meanwhile, the new rules will enable the ECA to provide substantive assessment of mergers and acquisitions under flexible procedural mechanisms. On 4 April 2024, Egyptian Prime Minister Moustafa Madbouly issued Decree No. 1120 of 2024 updating the executive regulations to enforce these amendments to the Egyptian Competition Law.
