“Nigerian Merger Control: Principle and Practice” is an analytical review of the Nigerian merger control regime under the Federal Competition and Consumer Protection Act 2018 (“FCCPA”) and the subsidiary enactments made pursuant to the FCCPA including the Notice of Threshold for Merger Notification 2019, The Federal Competition and Consumer Protection Act Merger Regulations 2020 (as Amended), The Federal Competition and Consumer Protection Commission Merger Review Guidelines (“Nigerian Merger Control Legislations”). The Book is divided into 4 (Four) parts. Below are the themes discussed in the 4 (Four) Parts of the Work
Part 1- Introduction
Part 1 starts with a description of mergers as a cyclical phenomenon with its workings deeply rooted in macro-economic factors and proceeds to discussing the rationale and catalysts for mergers. Part 1 then proceeds to discuss the objective of Nigerian competition law, generally and merger control specifically and argues that the Nigerian merger control has its foundation in the 1999 Constitution of the Federal Republic of Nigeria (as amended) with consumer welfare as its overarching objective. The Book also contends that whilst the African Continental Free Trade Agreement (“AfCFTA”) hold promises, it portends possible threat to the competitiveness of Nigeria as a sovereign political unit within the African continent. Part 1 further discusses the transactions covered within the ambits of the Nigerian Merger Control Legislations (“Covered Transactions”) e.g. combinations, asset acquisitions, share acquisitions, joint ventures. Part 1 concludes with the review of the merger review process contemplated by the Nigerian Merger Control Legislations
Part 2- Structural Analysis and Theories of Harm
Part 2 commences with discussions on market definition, that is, product market (including the interaction between demand-side substitutability, supply-side substitutability and potential competition) and geographic market. It emphasizes the importance of market definition but also highlights the relevant challenges with the exercise. It discusses the various qualitative and quantitative tools for market definition including but not limited to the SSNIP Test, the Critical Loss Analysis and Elasticities (that is, cross-price elasticity and own-price elasticity) etc. Part 2 turns to the examination of the various theories of harm associated with the classification mergers as horizontal, vertical and conglomerate mergers. Part 2 analyses the theories of harm contemplated by the Nigerian Merger Control Legislations, that is:
Part 3- Substantial Prevention and Lessening of Competition
The test espoused by the Nigerian Merger Control Legislations is the Substantial Prevention and Lessening of Competition test (“SPLC”). Part 3 commences with an examination of the contours of the SPLC test, that is (i) prevention of competition (ii) lessening of competition and (iii) substantiality. Part 3 then turns on the counterfactual analysis in the merger review process. Part goes further to examine the various tests for determining whether a proposed merger will have a SPLC effect.
Part 4-Trade Off Analysis and Remedies
Part 4 proceeds with the importance of a trade-off analysis when a proposed merger is found to be SPLC by examining efficiencies accruing from the merger. The work examines the efficiencies recognized by the Nigerian Merger Control Legislations. In addition to efficiencies, the Book discusses the trade off analysis in terms of the ability of Nigerian industries to compete in international markets, employment, interest of certain industries and the ability of the small and medium scale enterprises (“SMEs”) to compete effectively. The Book buttresses the importance of SMEs to the Nigerian market and recognizes that all SMEs are either directly affected by merger when they are absorbed or indirectly where the merging firms are more efficient competitors of the SMEs. Nevertheless, the Work argues that the competition authority should not proscribe efficient mergers that will benefit consumers solely for the protection of less efficient SMEs. The Book concludes with an analysis of the remedies for mergers that are SPLC. That is, structural remedies, behavioural remedies and hybrid remedies. It turns on the various ramifications of the remedies and the rationale for the regulatory preference for structural remedies above behavioural remedies.
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