Boost for Regional Integration as East African Community Competition Watchdog Goes Live

Regional competition authorities are essential for fostering fair and integrated markets across borders, especially in regions with strong economic ties like the East African Community (EAC).

As businesses increasingly operate across multiple countries, national competition laws alone are often insufficient to address cross-border anti-competitive practices such as cartels, abuse of dominance, and mergers with regional impact. Regional authorities help harmonize competition policies, reduce regulatory fragmentation, and ensure consistent enforcement across member states. They also support smaller or less-resourced national authorities by pooling expertise and facilitating joint investigations. 

It was for similar reasons that the East African Community Competition Act, 2006 (Competition Act) established the East African Community Competition Authority (the EACCA) as the institution responsible for implementing and enforcing cross-border competition law and policy within the EAC. 

On 1st July 2025 the EACCA issued a Notice of Commencement of Receipt of Notification of Mergers & Acquisitions with Cross-Border Effect by the EACCA (the Notice). According to the Notice, the EACCA will start receiving notification for merger and acquisition with cross – border effect from 1st November 2025. In this legal update, we look at the implication of the Notice to M&A transactions in the region. 

The EACCA and Merger Regime under the Competition Act

The EACCA is not a new authority as it was established through the Treaty for the Establishment of the East African Community and the Competition Act which came into force on 1st December 2014. 

Through the Competition Act, the EACCA has the authority to, among other things, receive merger notifications, review, and approve, or remedy cross-border mergers that have an anticompetitive effect in the EAC. Currently EAC is made up of the following countries Burundi, Congo, Somalia, Kenya, Rwanda, South Sudan, Uganda, and the United Republic of Tanzania.

Definition of Merger and Acquisition 

The Competition Act defines a merger as the acquisition of shares, business or other assets whether inside or outside the EAC resulting in the change of control of a business, part of a business or an asset of a business in the EAC in any manner and includes a take-over. 

Further, acquisition is defined as any acquisition by an undertaking of direct or indirect control of the whole or part of one or more other undertakings, irrespective of whether the acquisition is affected by merger, consolidation, take- over, purchase of securities or assets, contract or by any other means.

The Competition Act defines control as the right by an undertaking to exercise restraint or direction over another undertaking and includes:

• beneficial ownership of more than one half of the issued share capital, business or assets of the other undertaking;
• the ability to appoint or veto the appointment of more than half of the members of board of directors or similar body in the other undertaking; or
• the potential or actual ability of the undertaking to materially influence the business policy and operations of the other undertaking irrespective of the size of ownership change.

According to the East African Community Competition (Mergers and Acquisitions) Regulations, 2025 (M&A Regulations) a company intending to execute a cross-border merger or acquisition that is within the thresholds prescribed by the Council, shall notify the EACCA of the merger or acquisition, upon conclusion of the agreement in respect of the merger or acquisition. Please note that the obligation to notify the EACCA is placed on the acquiring entity.

Based on the legislation a merger or acquisition is considered to have cross-border effect, if it involves undertakings with operation in two or more Partner State. This means that a transaction might be notifiable even where the target does not operate in the EAC member state, but the acquiring entity operates in two or more member states.

Notification Thresholds 

A cross-border merger or acquisition is notifiable to the EACCA if it meets the following thresholds:

• the combined turnover or assets in the EAC of the merging parties, whichever is higher, equals to or exceeds US$ 35 million; and 
• at least two parties to the merger or acquisition have a combined turnover or assets of US$ 20 million in the EAC, unless each of the parties to a merger achieves at least two-thirds of its aggregate turnover or assets in the EAC within one and the same Partner State.

Given this, for a merger to be notified to the EACCA, it must meet the regional dimension test, that is the undertakings involved must operate in two or more EAC member states and meet the notification financial threshold.

Implication of the Notice to Merger & Acquisition in the Region 

Following the Notice, the EACCA will start receiving merger and acquisition applications from 1st November 2025. The acquiring party involved in a merger will be expected to file an application to the EACCA immediately after concluding transaction documents. The EACCA application will have a suspensory effect, therefore parties will not be able to conclude the transaction until they have received the EACCA approval.

Please note that the EACCA will act as a one-stop shop for the members states and as such once a notification of a merger or acquisition is made to the EACCA, there is no need to notify the same to the national competition authorities. In order to suspend national notification requirements/obligations, it may be necessary for such national laws to be amended to exempt filing obligations if the merger is notified to the EACCA. 

Further the Notice also states that any merger proceedings with a cross-border effect that had commenced or are pending before a national competition authority or any other relevant authority within a Partner State before the publication of the Notice will be finalized by the respective authorities. This means that for transactions that have not been submitted to national competition authorities and meets the regional dimensions and financial tests under the EACCA merger regime will have to be notified to the EACCA by 1st November 2025.

Conclusion 

The commencement of merger application intake by the EACCA marks a pivotal step toward deepening regional economic integration and fostering a fair, transparent business environment. As cross-border transactions become more frequent within the EAC, the Authority’s operationalization ensures that competition concerns are addressed consistently and efficiently across member states. This development not only strengthens investor confidence but also reinforces the EAC’s commitment to promoting consumer welfare and sustainable market growth. Businesses and stakeholders are now encouraged to engage proactively with the EACCA to ensure compliance and contribute to a more competitive regional economy.