First merger approved under Angolan merger control regime
The newly created Angolan competition authority, the Autoridade Reguladora da Concorrência (ARC), has approved its first merger since becoming operational in early 2019. This approval marks the first application of Law 5/2018, Angolan’s first competition legislation, which was adopted in May 2018. Companies envisaging mergers and acquisitions (including foreign-to-foreign transactions) with effect in Angola should assess whether such transactions are subject to mandatory filing to the ARC and, if so, ensure that closing does not take place before obtaining clearance.
Law 5/2018 established a competition regulatory framework in Angola and created the ARC. Implementing regulations were approved by Presidential Decree 240/18 on 12 October 2018, while rules establishing the ARC were approved on 21 December 2018. The ARC became operational on 25 January 2019 when the members of the Board of Directors were appointed.
With a strong reliance on European competition law, Law 5/2018 contains a range of provisions, including prohibitions of restrictive business practices as well as abuses of dominance. In addition, the law also introduces a merger control regime in Angola. Transactions satisfying the following thresholds must be notified to and approved by the ARC:
- the combined market share exceeds 50%, or
- the combined market share is between 30% and 50% and individual turnover in Angola of at least two parties exceeds AOA 450m (approx. USD 1.3m), or
- combined turnover in Angola of all parties exceeds AOA 3.5bn (approx. USD 10m).
Fines up to 10% of the parties’ turnover can be imposed if a notifiable transaction is implemented without the ARC’s approval.
Similar to the European Commission’s procedure, the ARC’s review is divided into two distinct phases, phase I for simplified reviews and phase II for in-depth investigations. There is no specified time period for phase I but the ARC must complete its whole review (including phase II) within 120 working days from notification or otherwise the transaction is deemed to be tacitly authorised. At the end of phase I, the ARC may approve a transaction or initiate an in-depth investigation.
While information on the ARC’s enforcement activity is still limited, the ARC’s decision on 4 July 2019 to approve the merger between Banco Económico and Seguradoras Unidas and Tranquilidade in the Angolan financial services sector is the first approval under the Angolan merger control regime. As this merger was notified on 25 March 2019, the ARC took three and half months to conclude that there was no likelihood that competition would be undermined in the relevant markets.
The introduction of the Angolan merger control regime brings Angola in line with the vast majority of Southern African countries with active competition legal frameworks. Companies envisaging mergers and acquisitions with effect in Angola should assess whether such transactions may be subject to mandatory filing to the ARC and, in the affirmative, ensure that closing does not take place before obtaining clearance.