An Examination of General Merger Control Exemptions

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ABSTRACT

An Examination of General Merger Control Exemptions

Professor Gbolahan Elias, SAN*

The paper argues that Nigeria’s general exemptions from merger control should be more wide-ranging, more coherent and more refined than they currently are. As the law stands today, small deals are the only clear exemptions from our rules calling for mergers and acquisitions deals to get prior regulatory review and approval for competition law purposes. The paper recommends adding sophisticated exemptions for real estate deals, intra-group deals, true investment companies and certain foreign and governmental deals. In the course of the paper, a number of provocative views are advanced on a variety of aspects of general merger control law.Exemptions that are specific to certain sectors of the economy (rather than  sector-neutral) are outside the scope of the paper.

INTRODUCTION
This paper examines the Nigerian rules exempting mergers and acquisitions from the general prior notification-and-review regulatory process that has been established for competition law purposes. At a conceptual level, exemptions from merger control fall into two broad classes: those that exempt transactions involving participants in specific sectors of the economy; and those that are sector-neutral, that apply across all sectors. Exemptions in the former class are not dealt with in this paper.

Only the latter class of exemptions is dealt with in this paper. It is this latter class of exemptions that we refer to in this paper as ‘general’ (as distinct from sector-specific). The theme and conclusion will be that the general exemptions in Nigerian law need to be more detailed, more coherent and more wide-ranging than they currently are.

Because our general exemptions today are too narrow, the merger pre-notification rules tend to exceed their proper remit and cause much unnecessary irritation, annoyance, expense and delay. Another casualty of the general exemptions being too narrow is that lawyers are frequently tempted to engage in doubtful legal reasoning and analysis. The doubtful reasoning and analysis has made much of the law confused.

Nigerian law has borrowed significantly, but not as much as it needs to, from the law in the USA and other countries in this area. That law is often far more fully-developed than ours on the subject of general exemptions and has much to commend it. We will therefore make frequent references to examples from outside Nigeria and consider what lessons they may hold for us.

The paper has ten PARTS. The first four PARTS are primarily about matters that form the background to the Nigerian legislation. They deal respectively with: some basic ideas; basic legislative history; some proposals for new legislation; and the key themes of general exemptions from merger control.

* Visiting Professor, Babcock University, Ilishan and Principal Partner, G. Elias & Co, Lagos. I thank my colleagues with whom I have discussed a number of the issues arising from time to time: Segun Omoregie, Fidelis Adewole, Onyinye Chukwu and Uju Ifebunandu

THE GRAVITAS REVIEW OF BUSINESS & PROPERTY LAW VOL.7 NO.1