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What is a Merger and how is a merger defined under the Competition and Consumer Protection Act No.24 of 2010 (CCPA)?

A merger can simply be defined as a transaction between two or more independent parties which results in one party acquiring interest in the other party. This interest maybe through shares or assets or an agreement to work together in a joint venture. This acquired interest prevents to an extent the free will of the acquired party to make independent business decisions on its operations.

Section 24 of the CCPA considers a transaction to be a merger when an enterprise, directly or indirectly, acquires or establishes, direct or indirect, control over the whole or part of the business of another enterprise, or when two or more enterprises mutually agree to adopt arrangements for common ownership or control over the whole or part of their respective businesses.  

Are all Mergers Notifiable?

Not all mergers are notifiable. Only mergers that,

  • Meet the threshold as provided for in the Statutory Instrument No. 97 of 2011,
  • Result in change of control as provided for under Section 24(3) of the CCPA and
  • Have an appropriate local nexus are notifiable.

The current threshold is 50 million fee units (equivalent to ZMK15 million). In order to determine whether the parties meet the threshold, their assets are added together and their turnovers are equally added together. If one of the resultant figures is higher than ZMK15 million, then the merger satisfies one condition for notification. It is important to note that a fee unit is not constant. Currently, a fee unit is at 30 Ngwee (K0.30) according to Statutory Instrument (SI) No. 41 of 2015. The Commission will also consider whether the transaction results in change of control which can be direct or indirect (See Section 24(3) of the CCPA). The Commission will further consider if the transaction will have a connection with Zambia that is, whether the parties are present or have a presence in Zambia (See the Commissions Guidelines for Merger Regulations).

What is Negative Clearance and when is it obtained?

Negative Clearance is where parties to a merger transaction are not sure whether or not it qualifies for notification with the Commission, they may apply to the Commission for negative clearance (defined under Section 28 of the CCPA). Parties can in this way seek guidance from the Commission as to whether a transaction or proposed transaction meets the criteria for merger notification. Form 1 must be completed in lodging an application for negative clearance and parties will be required to pay the prescribed fee stipulated under the SI 97 of 2011 upon the Commission issuing an invoice.

Negative clearances may be given for a variety of reasons. In some cases, the Commission has calculated that the merged entity’s turnover fall below the notification threshold. In other cases, it has concluded that a merger would not be created because the activity would not lead to any change of control among the enterprises concerned. In cases where a merger is concluded outside Zambia has no effect in Zambia, negative clearance may be granted.

What does single economic entity mean and how does the Commission use this concept in merger analysis?

Any two or more bodies corporate are treated as interconnected if one or more of them is a subsidiary or are subsidiaries of the other, or if all of them are subsidiaries of the same body corporate as provided for under Section 2 of the CCPA. For the purposes of competition law, such companies are treated collectively as an enterprise. Therefore, any activities and assignment of functions amongst themselves is exempted from merger notification as provided for under Section 13 of the CCPA.

The Commission uses this concept to show that all companies categorised as a single economic entity will be regarded as an enterprise and party to a merger. For instance, if there are two companies, A and C that want to merge, and it turns out that  company A (parent company) has a subsidiary (company B), by using the single economic entity doctrine the Commission will consider also company B as it falls under common ownership with A in its analysis of the merger with company C. The single economic doctrine will also apply when determining the notification fee.

How does the Commission determine if parties meet the threshold?

Once the parties to a merger are identified, the regulations provide that the sum of the combined assets or combined turnovers of the parties to the merger be used. If the combined assets or turnover of the parties exceed the set threshold in the Statutory Instrument No 97 of 2011, then the merger is deemed to have met the notification threshold. For example


Party 1

Part 2



Assets (ZMK)





Turnover (ZMK)





In the example above, the combined assets of the parties are more than 15, 000,000 and hence the merger is considered to be a notifiable merger. Note that, there are circumstances in which both the turnover and assets meet the notification threshold and the Commission will use whichever is higher in determining the fee.

How does the Commission calculate merger notification fees?

To calculate the notification fee, the Commission considers either the sum of assets for the parties or the sum of turnover for the parties whichever is higher for the purposes of the notification fee. SI 97 of 2011 provides for a percentage fee of 0.1% of the considered figure above. For example,


Party 1

Part 2










In the table above, the Commission would consider the sum of assets for the parties as it is higher than the turnover and would calculate 0.1% as follows.0.1/100*95 000,000= K95 000. It should be noted that there is a cap to the payable fees of 16,666.667 fee units (currently ZMK5 million). This means that where the calculated fee exceeds ZMK5 million, parties will be required to pay the cap of ZMK5 million.

Who is supposed to pay the notification fee?

Parties to the merger are required to pay the notification fee. How they contribute towards the notification fee and who makes the payment is entirely up to them. The fees are paid against a raised invoice by the Commission and are payable to an account as contained in the invoice.

What is the meaning of “operating” in Zambia when it comes to mergers?

Operating in Zambia means enterprises wholly domiciled in Zambia. It also means companies that are wholly domiciled outside Zambia but have a presence in the Zambian market through export sales or the presence of subsidiaries. In the case where the presence is as a result of export sales into Zambia, such a transaction will be considered by the Commission to have an appropriate local nexus if the export sales into the relevant market(s) have been at least 10% for the last preceding three years.

Is notification mandatory or voluntary?

Notification is mandatory according to section 26 of the CCPA for all notifiable mergers or mergers that meet the notification criteria.

Notification entails the lodging in of all relevant documents with the Commission and the payment of a statutory notification fee. Parties to a merger must fill in a Form 1 and supply relevant documents as requested in the form. Only when all relevant documents have been submitted and notification fee paid will notification be deemed to be complete.

Are non-notifiable mergers reviewable?

According to Section 27 of the CCPA which states that the Commission may, where it has reasonable grounds to believe that a merger falls below the prescribed threshold, review the merger”

It is not mandatory for merging parties to notify merger transactions that are below the prescribed threshold. Nevertheless, the Commission may ask parties to notify such a merger if the Commission has reason to believe that the merger could lead to substantial lessening of competition, public interest concerns and a position of dominance that needs to be reviewed.

To whom is the notification made?

The CCPA does not specify as to whom notification is to be made. However, Section 6 of the CCPA states that the Executive Director shall be the Chief Executive Officer of the Commission and shall be responsible under the direction of the Board for the day to day administration of the Commission, It therefore follows that notification   is made to the Commission through the Executive Director.

Who should notify a transaction with the Commission?

According to Statutory Instrument No. 97 of 2011 which states that The Commission prefers a single application made jointly by all the parties to an agreement, though parties may submit separate notifications if they wish, particularly if they wish to include information which they do not want to be given to the other parties.  Either way, it is essential that the application(s) include authorised signatures given on behalf of each of the parties separately”.

Therefore, the Commission takes it that any party or parties jointly to a transaction or any appointed person may notify the Commission.

What must be filed with the Commission?

A filled in Form 1, audited financial statements of the merging parties generating a turnover in Zambia, the share purchase agreement between the parties, strategic plans of the merging parties and plans for the merged entity, merging parties Board resolutions authorising the implementation of the merger, press statements, annual reports and any other information on the businesses and the markets where they operate.

Is the regime for merger control in Zambia Suspensory?

Yes. The merger control regime in Zambia is suspensory which implies that the parties to the transaction are indefinitely prevented from effecting the transaction until they have received clearance from the Commission.

How long does it take for the Commission to issue a determination?

By law the Commission shall complete its assessment of a proposed merger and issue its determination within a period of ninety days from the date of full notification for authorization. However, the Commission can also extend the 90 day period for up to 30 day calendar days. The Commission shall, where it extends the assessment period give notice to the parties at least 14 days before the expiry of the ninety days.

However, in practice the Commission takes 45 days for simple mergers and 90 days for complex mergers. To date the Commission has never extended a merger.

What process does a case under go before receiving final approval and who gives it?
  1. The Commission conducts investigations on the merger, this also involves consultation with third parties such as customers, competitors, industry experts, sector regulators if any etc. the investigations involve competition and public interest assessment.
  1. The Commission writes a report which goes to the Technical Committee of the Board of Commissioners. This is a subcommittee of the Board of Commissioners.
  1. When the Technical Committee considers the case, parties are given interim decision. This decision may be unconditional, conditional or a rejection of the merger.
  1. The report is then sent to the full Board of Commissioners for adjudication which considers the case and grants the final decision. It is very rare that the Board over rules the Technical Committee.
What can parties to a transaction do with an interim approval?

An interim approval is given to merging parties by the Technical Committee of the Board of Commissioners. Parties can consummate the merger pending final authorisation from the full Board of Commissioners. It is a requirement that merging parties adhere to the conditions if any in the interim approval.

Parties to the transaction need to adhere to the conditions if any in the interim approval before final approval is granted.

What are the possible outcomes of a merger notification?
  1. Approval of the proposed merger without any conditions;
  1. Approval of the proposed merger with conditions or undertakings given by the parties to address competition concerns that may have arisen during the assessment of the proposed merger;
  1. Reject the proposed merger. The Commission shall, where it rejects a proposed merger, inform the parties accordingly and give the reasons therefore.
Can parties contest the decisions made by the Board?

Yes, parties can contest the Board’s decision as they can appeal within 30 days from the date of receiving the Board decision to the Competition and Consumer Protection Tribunal (Tribunal).

What does the Commission mean by “merger specific” conditions in merger?

These are conditions given to a specific merger after assessment which the merging parties should adhere to.

What are the consequences of breaching Merger Conditions?

According to Section 37 of the CCPA, an enterprise that breaches merger conditions is liable to a fine not exceeding ten percent of its turnover.

What are the consequences of implementing a merger without approval from CCPC?

According to section 37 of the CCPA, the transaction is illegal and therefore all arrangements between the parties shall be null and void. Further, the Commission can charge such parties a fine of up to ten percent of their annual turnover.

When is a merger Anti-competitive?

According to Section 8 of the CCPA, a merger is anti-competitive when it has the object or effect of preventing, restricting or distorting competition to an appreciable extent in Zambia.

Should mergers that meet the “regional dimension” be notified with both COMESA Competition Commission and the Commission?

No. According to Article 23(a) and 23(b) of the COMESA Competition Regulations, a merger is notifiable with the COMESA Competition Commission if  “both the  acquiring firm  and  target  firm  or  either  the  acquiring firm or target firm operate in two or more Member States”;  and “the    threshold  of    combined annual    turnover or    assets  provided for in paragraph 4 is exceeded”.

Currently, a merger is notifiable with the COMESA Competition Commission if the combined annual turnover or combined value of assets, whichever is higher, in the Common Market of all parties to a merger equals or exceeds US$50 million; and the annual turnover or value of assets, whichever is higher, in the Common Market of each of at least 2 parties to a merger equals or exceeds US$10 million, unless each of the parties to a merger achieves at least two-thirds of its aggregate turnover or assets in the Common Market within one and the same Member State.

It is only when parties to a merger do not meet these requirements that they only need to notify the transaction with the Commission in Zambia and the other affected countries.

PDF Version of Mergers FAQ

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