Nigeria tweaks M&A regulation

Nigeria has recently witnessed a shift in its merger and acquisition (M&A) regulatory landscape with the establishment of the Federal Competition and Consumer Protection Commission (FCCPC). This move marks a departure from the previous oversight of M&A activity by the Securities and Exchange Commission (SEC). The FCCPC, in collaboration with the SEC, has unveiled its first joint advisory and guidance on M&A transactions, shedding light on the new regulatory framework. Zelda Akindele, Partner at Templars, delved into the implications of the advisory in a recent interview with CNBC Africa. The key theme underlying the revised M&A regulations in Nigeria is the expansion of oversight to encompass not only merger control but also broader competition and consumer protection issues. Akindele highlighted several inadequacies in the previous regulatory framework that the new act aims to address. These include uncertainties around asset sales, treatment of overseas merger activities involving Nigerian subsidiaries, joint ventures, and the absence of clear guidelines on various M&A scenarios. Three key points emerge from Akindele's insights. Firstly, the new regulatory framework clarifies the jurisdiction of the FCCPC over M&A transactions, emphasizing commercial activities within Nigeria's purview. Secondly, the FCCPC and SEC have outlined a transition period for pending transactions, with joint review processes guided by existing SEC rules until the FCCPC establishes its own regulations. Lastly, the coexistence of old SEC rules and the new act raises questions about potential conflicts and gaps in regulatory enforcement, highlighting the need for clarity and consistency in the evolving regulatory landscape. Commenting on the transition period for pending transactions, Akindele highlighted market uncertainties preceding the issuance of the joint advisory. The collaborative approach adopted by the FCCPC and SEC offers a transitional framework for market participants, allowing for continued M&A activities under familiar regulatory guidelines. However, questions linger around the hierarchy of regulatory standards in case of conflicts between outdated SEC rules and the new act. Akindele underscored the importance of aligning regulatory practices with the evolving legal landscape to ensure market stability and compliance. As Nigeria navigates the transition towards enhanced M&A regulations, stakeholders are urged to closely monitor developments and engage with regulatory authorities to navigate the evolving landscape effectively. The FCCPC's forthcoming regulations are expected to provide further clarity and guidance for market participants, bridging gaps and ensuring alignment with international best practices. The joint advisory signals a proactive approach by Nigerian regulators to enhance transparency and efficiency in the M&A ecosystem, setting the stage for a more robust and investor-friendly regulatory environment. In conclusion, the recent developments in Nigeria's M&A regulations reflect a broader commitment to strengthening competition and consumer protection frameworks in line with global standards. The collaboration between the FCCPC and SEC signifies a milestone in regulatory convergence, underlining the importance of clarity, consistency, and adaptability in navigating regulatory transitions. As market participants adapt to the new regulatory landscape, proactive engagement with regulators and legal advisors will be crucial to ensuring compliance and seizing opportunities amidst evolving market dynamics.