Mergers and acquisitions (M&A) are transactions that unite two businesses. A merger generally involves the combination of two companies of similar size and strength, while an acquisition occurs when one company, which is often larger, purchases another. A merger includes the acquisition of shares, business operations, or assets that result in a change of control of a business or part of it, and may also take the form of a takeover. 

John Blake, a Partner at Translink Corporate Finance South Africa, opines that emerging markets have become key destinations for cross-border M&A as companies from developed economies seek growth beyond saturated markets. He notes that emerging markets spanning Asia, Latin America, Africa, and Eastern Europe offer higher GDP growth rates compared to developed economies. This growth is driven by the expansion of the middle class, urbanisation, and rising consumer demand, making these regions attractive for investment.

Cross-border mergers and acquisitions occur when either the acquiring company or the target company, or both, operate in different countries. This is where the East African Community Competition Authority (EACCA) comes into play. The body was established by the East African Community Competition Act, 2006, to implement and enforce cross-border competition law and policy within the East African Community. The EACCA is empowered to receive merger notifications, review, and approve or address cross-border mergers that have an anticompetitive effect in the region.

In its new policy, the EACCA will start accepting applications and notifications for cross-border M&A from 1 November 2025. Specifically, a transaction must be notified to the EACCA if the combined turnover or assets of the merging undertakings in the Community equal or exceed USD 35 million. The second criterion is if at least two of the undertakings involved each have a turnover or assets of USD 20 million within the EAC, unless both achieve two-thirds of their total turnover or assets within a single Partner State. 

This policy outlines notification fees, which will be based on the total value of assets or the transaction’s turnover, whichever is higher. Transactions valued between USD 35 million and USD 50 million will incur a notification fee of USD 45,000. At the same time, those exceeding USD 50 million but not more than USD 100 million will be subject to a fee of USD 70,000. For transactions exceeding USD 100 million, the applicable fee is USD 100,000.

The new policy also states that once notified to the EACCA, no parallel filings are needed with the National Competition Authorities (NCAs) of the Partner States. Traditionally, NCAs in countries such as Kenya, South Africa, Tanzania, and Zambia have taken the lead in regulating competition issues, including M&A with domestic impact. Their primary role has been to ensure that market concentration does not harm consumer welfare, stifle competition, or entrench dominance. This new development redefines the relationship between national and regional competition oversight. However, any merger proceedings with a cross-border effect that had begun or are pending before a national competition authority or any other relevant authority within a Partner State before the policy comes into force shall be concluded by the respective authorities.

Implications for Industry Stakeholders

Businesses will face extra compliance requirements. The new transaction fees add further costs. These fees are in addition to legal, advisory, due diligence, and capital expenses already associated with M&A deals, thereby increasing the total cost of completing transactions. 

Companies will face longer transaction timelines. With the introduction of the new regulatory layer, approvals may take longer, creating uncertainty and potential delays in deal closures. Businesses will need to factor this into their strategic planning and negotiations, as prolonged timelines could affect financing, market entry, or integration strategies.

The policy could cause changes in strategic decision-making. Larger companies might organise deals differently to avoid exceeding higher notification thresholds, while smaller firms may favour joint ventures, partnerships, or incremental expansion strategies to stay below the prescribed levels.

The advantage is that the rule enhances market confidence and fairness. By requiring oversight of large transactions, the EACCA aims to prevent monopolistic practices, promote fair competition, and ensure consumers benefit from innovation, lower costs, and improved service quality. This can improve the business environment and create a level playing field for both regional and foreign investors.

Conclusion 

The launch of the EAC Competition Authority’s merger notification regime is an important milestone for regional integration. However, doubts persist over its effectiveness, considering the EAC Secretariat’s historically weak enforcement record and limited institutional strength. In comparison, it is crucial to note that the COMESA Competition Commission (CCC), established in 2013, was the first authority in Africa to implement a binding regional merger control regime. The CCC quickly established itself as a key player, with its decisions having direct effects across COMESA’s 21 member states. Whether the EACCA can follow suit remains to be seen. For now, all attention will be on how the Authority interprets its mandate, enforces compliance, and asserts itself in the regional market. What is clear is that its effectiveness or lack thereof will have far-reaching implications for competition policy, cross-border investment, and business strategy in East Africa.