Many acquisitions in Zambia need the approval of the Competition and Consumer Protection Commission (CCPC) before they are implemented. Getting this wrong can make a transaction void and expose the parties to heavy fines. This guide explains when the merger rules in the Competition and Consumer Protection Act No. 24 of 2010, as amended most recently in 2023, apply and how the approval process works.
What counts as a merger
Law cited
Competition and Consumer Protection Act No. 24 of 2010, as amended in 2013 and by Act No. 21 of 2023: definition of merger (section 24); reviewable mergers (sections 25 and 27); authorisation threshold and void mergers (section 26); assessment period (section 32); offences (section 37).
Under section 24, a merger occurs where an enterprise directly or indirectly acquires or establishes direct or indirect control over the whole or part of the business of another enterprise, or where two or more enterprises agree to arrangements for common ownership or control over all or part of their businesses. A merger can be achieved, among other ways, by buying shares, leasing or acquiring assets, or acquiring an interest in shares or assets, or by amalgamation.
When approval is required
Under section 26, the parties to a merger that meets the threshold prescribed by the Minister by statutory instrument must apply to the Commission for authorisation before implementing it. The threshold is set in subsidiary legislation and can change, so check the current figure for each transaction.
Even below the threshold, the Commission may review a merger in certain circumstances, for example where it may substantially prevent or lessen competition, where a dominant position is being built up through a series of acquisitions, or where a merger concluded outside Zambia has consequences in Zambia that require consideration.
The review period
Under section 32, the Commission must complete its assessment and issue its determination within ninety days of the application, unless a party fails to provide required information. The Commission may extend the period by up to thirty days. If it does not issue a determination within the period, the merger is deemed to be approved. The Commission may approve or reject the application, and must give reasons if it rejects it.
Consequences of not notifying
- A merger that meets the threshold and is implemented without the Commission’s authorisation is void.
- Implementing a merger without the Commission’s approval, or implementing a merger the Commission has rejected, is an offence punishable by a fine of up to ten per cent of the enterprise’s annual turnover.
Cross-border transactions
Transactions involving businesses in several countries may also engage regional competition rules, including those of the Common Market for Eastern and Southern Africa (COMESA), which the Act refers to. Check whether a regional filing is needed alongside, or instead of, a national one.
Building approval into the deal
Make competition approval a condition of completion, allow time for the review in the transaction timetable and do not take steps that amount to implementing the merger before approval. Other regulators may also need to approve, for example the Minerals Regulation Commission for changes of control in the mining sector. See our guide to transferring mining rights.
Our mergers and acquisitions team advises on transactions, including the regulatory approvals they engage.
Frequently asked questions
Does every acquisition need CCPC approval?
No. Prior authorisation is required where the merger meets the prescribed threshold, although the Commission can review some mergers below the threshold.
What are the thresholds?
They are prescribed by the Minister by statutory instrument. Check the current figures before each transaction.
Can the deal close before approval?
No, if the merger meets the threshold. Implementing it without authorisation makes it void and is an offence carrying a fine of up to ten per cent of annual turnover.
How long does the CCPC take?
Ninety days from the application, extendable by up to thirty days. If no determination is issued in time, the merger is deemed approved.
