In terms of a recently enacted Statutory Instrument, Number 41 of 2015, the value of a “fee unit” has been changed from 0.2 ZMW to 0.3 ZMW. This is the second increase in the fee unit applicable in Zambia in 18 months.
“Fee units” form the basis for calculating merger filing fees and merger thresholds, which are prescribed in terms of the Competition and Consumer Protection (General) Regulations, 2011, issued pursuant to the Competition and Consumer Protection Act, 24 of 2010 (Competition Act). Following the adjustment to the “fee units”, filing fees will now be subject to a higher cap, meaning that higher filing fees will be payable in some instances. However, the thresholds for mandatory notification have been increased, meaning that it will not be mandatory to notify certain transactions (falling below the increased thresholds).
- Merger filing fees: The filing fee payable for a merger application is 0.1% of the turnover or assets, whichever is the higher, subject to a cap of 16,666,667 fee units. Following the value adjustment to the fee unit, the cap in filing fees will now equate to ZMW 5 million (approx. US$ 631,552).
- Merger thresholds: The thresholds for a mandatory merger are where the merging parties’ combined turnover or assets, whichever is higher, in Zambia, is 50 million fee units in the parties’ latest full financial year for which figures are available. Following the value adjustment to the fee unit, the threshold will equate to ZMW 15 million (approx. US$ 1.9 million).
In terms of section 27 of the Competition Act, the Competition and Consumer Protection Commission may still review any merger which falls below the threshold if certain conditions exist, e.g. if a merger is likely to create a position of dominance in a localised product or geographic market, or if a merger is likely to contribute to the creation of a dominant position through a series of acquisitions which are not individually subject to prior notification.
Bowman Gilfillan Africa Group