A merger is the amalgamation of the undertakings of two companies, or a company and a body corporate, into one. Section 92 of the Federal Competition and Consumer Protection Act (FCCPA) 2018 defines a merger as one or more undertakings acquiring or establishing direct or indirect control over the whole or part of the business of another, including by purchase/lease of shares/assets, amalgamation, or joint venture.
The entities involved may either be in the same industry—in which case they may be seeking to pool their resources together in order to profit from economies of scale, called a “horizontal merger”—or they could both be in the same industry but at different stages in the supply chain. For example, when a manufacturer and a distributor merge, they might be seeking to improve efficiency and gain more control of the supply process; this is called a vertical merger.
Conglomerate mergers and concentric mergers are other types of mergers. A conglomerate merger is one where the companies operate in unrelated industries, while a concentric merger involves companies operating in the same or similar industries but who are not direct competitors.
A merger may arise in two distinct ways: through absorption, where one of the companies integrates into the other, or through consolidation, where each company dissolves and a new one is created with the resources of the two dissolved companies.
Mergers can also be classified into small and large. Large mergers are those with a value above the threshold stipulated by the Federal Competition and Consumer Protection regulations. If, in the financial year preceding the merger, the combined annual turnover of both the acquiring company and the target company is equal to or more than 1 billion Naira, or the value of the target company alone is equal to or more than 500 million Naira, it is a large merger. Small mergers are those where the turnover is less than the amount stipulated.
Companies merge in order to pool their resources, beat their competition, or save themselves from folding up.
The Federal Competition and Consumer Protection Commission (FCCPC), Corporate Affairs Commission (CAC), Central Bank of Nigeria (CBN), and Securities and Exchange Commission (SEC) are agencies responsible, directly or indirectly, for regulating mergers in Nigeria. They do so based on the provisions of relevant statutes like the Federal Competition and Consumer Protection Act, the Companies and Allied Matters Act (CAMA), the Securities and Exchange Act, and the Investments and Securities Act (ISA).
When a company decides to merge with another, the first thing it does is plan strategically. This involves having internal meetings, performing due diligence by reviewing the other company’s financial, legal, and operational records, and preparing a letter of intent or a memorandum of understanding.
After finalizing their intent to merge, companies that meet or exceed the threshold set in the FCCPA need to notify and submit relevant documents to the FCCPC for approval. This is to ensure that the merger does not substantially prevent or lessen competition (SPLC) in the market. Failure to get approval from the FCCPC will result in every action taken becoming void.
The FCCPC will also impose administrative penalties where the parties need to pay a fine. The fine starts with a base of 2% of the preceding year’s turnover, to which a duration penalty is added (calculated by dividing the months of violation by 12 and multiplying by the base). Finally, this subtotal is either increased by aggravating factors (like repeat offenses) or reduced by mitigating factors (like self-reporting).
Where the parties still fail to satisfy the administrative penalties, the FCCPC can criminally prosecute them. In such a prosecution, the parties can be fined a maximum amount of 10% of their preceding year’s turnover.
After approval by the FCCPC, any of the parties can then apply to the court by summary application for the court to order separate meetings of members to be summoned as the court directs. Where the meeting is held and members (or their proxies) who hold up to 75% of the shares vote in approval of the merger, one of the companies can apply to the court for sanction.
The court’s sanction serves as the definitive legal bridge for a merger. The court issues a sanctioning order providing for the seamless transfer of the undertaking, property, and liabilities, alongside the allotment of shares or debentures to relevant parties. This order ensures legal continuity by allowing for the transition of pending proceedings and, notably, enables the dissolution of transferor companies without the traditional winding-up process.
However, this dissolution is contingent upon a comprehensive transfer and the fulfillment of employee compensation requirements, protection of dissenters, and other incidental matters. A copy of the court sanction or order is to be delivered to the Corporate Affairs Commission (CAC), and a notice must be published in a Federal Gazette and at least one national newspaper.
For public companies, approval from the Securities and Exchange Commission (SEC) is an added prerequisite for a merger. The SEC is focused on ensuring fair, equitable, and similar treatment of all shareholders and ensuring they receive sufficient information about the transaction.
Prior to going to court and engaging in the process stipulated by Section 711 of CAMA, the SEC gives the parties an “approval in principle.” After the parties have applied to the court, held the meeting, and met the 75% threshold, the SEC can then give formal approval, often called a “No Objection.”
Section 141 of ISA 2025 is consistent with the steps provided in Section 711 of CAMA, with the addition that parties must also submit an office copy of the court order to the SEC within seven days after the court has sanctioned the merger. A notice of the court order is also to be published in at least one national newspaper; failure to comply attracts a fine of 250,000 Naira plus 1,000 Naira for each additional day the parties default.
The above provisions are the central regulations that guide mergers in Nigeria; however, there are still some sector-specific regulations that govern mergers in particular industries, either exclusively or concurrently with the FCCPA and ISA.
A major example of such is the Banks and Other Financial Institutions Act (BOFIA) 2020. The Central Bank of Nigeria has exclusive jurisdiction over mergers involving banks or other CBN-accredited financial institutions. Section 65 of BOFIA clarifies that while the merger provisions of the FCCPA apply, all references to the FCCPC are construed as references to the CBN. Banks and other financial institutions need the CBN’s written consent before making any merger agreement.
The CBN must be satisfied that the transaction will not restrain competition unduly, create a monopoly, harm public interest, or result in disqualified significant shareholders, and that the resulting entity meets minimum capital requirements.
In the petroleum sector, the Petroleum Industry Act (PIA) 2021 governs assignments, mergers, transfers, and acquisitions of interests in petroleum licenses and leases. Section 95 of the PIA requires the consent of the Minister of Petroleum (acting on the recommendation of the Nigerian Upstream Petroleum Regulatory Commission – NUPRC) for any assignment, merger, or transfer.
The Act emphasizes national interest, local content, and environmental considerations, and it provides detailed rules for upstream, midstream, and downstream operations, including the need for regulatory approvals from the NUPRC or the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) depending on the segment.
For the telecommunications industry, the Nigerian Communications Act (NCA) 2003 gives the Nigerian Communications Commission (NCC) broad powers over competition matters. Section 90 confers on the NCC exclusive competence to determine, administer, monitor, and enforce competition laws as they relate to the Nigerian communications market. This includes the review and approval of mergers, acquisitions, and takeovers that affect licenses or market structure, often exercised concurrently with the FCCPC.
Furthermore, the Electricity Act 2023 requires approval from the Nigerian Electricity Regulatory Commission (NERC) for mergers or acquisitions that impact electricity licenses or market power. In insurance, the Insurance Act 2003 (as amended) mandates prior approval or a “no-objection” from the National Insurance Commission (NAICOM) for mergers or significant share acquisitions.
Tax implications are addressed primarily under the Nigeria Tax Act (NTA) 2025, which consolidated earlier tax statutes. The NTA provides for tax neutrality in qualifying mergers and group restructurings, allowing the transfer of unutilized capital allowances, unabsorbed losses, and withholding tax credits to the surviving entity.
It also covers capital gains tax on share or asset disposals arising from mergers (generally at the corporate income tax rate), stamp duty on relevant instruments, and the need for Federal Inland Revenue Service (FIRS) clearance or direction on tax liabilities before court sanction or implementation.
Foreign elements in a merger engage the Nigerian Investment Promotion Commission (NIPC) Act (as amended), which governs foreign participation and guarantees against expropriation while requiring registration or notification in certain cases. Cross-border payment and repatriation aspects fall under the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act and CBN forex regulations, which may require approvals or reporting for foreign currency consideration.
Finally, ancillary compliance arises under laws such as the Nigerian Data Protection Act 2023 (for transfer of personal data) and anti-money laundering statutes (for enhanced due diligence). These laws ensure that mergers do not only satisfy corporate, competition, and shareholder fairness requirements but also uphold sector stability, tax integrity, national interest, and broader regulatory compliance. In practice, parties must obtain these approvals in parallel where possible, as non-compliance can void the transaction or delay court sanction under CAMA.
About the Authors:
Solagbade Oluwole is a Senior Associate at Supo Ati-John & Co. and a Barrister of the Supreme Court of Nigeria. An expert in corporate legal practice, insolvency, and debt recovery, he collaborates with agencies like the EFCC and Interpol to resolve complex financial disputes. He holds an LL.M from UNILAG and is an AAT holder (ICAN). As an experienced lecturer, he trains MBA students and candidates for professional bodies including ACCA, ICAN, CIMA, and the AAT.
Ogochukwu Mbah is a law graduate of the University of Nigeria and a researcher focused on the intersection of finance and technology. Her work explores predictive analytics and the evolving regulatory frameworks governing fintech and financial innovation in Nigeria. She is an advocate for data-driven legal practice and human rights, specializing in legal advancements for modern business transactions.
References
Sect 92(4)(a) of the Federal Competition and Consumer Protection Act(FCCPA)
Sect 1(1.1)a of the FCCPA
Sect 1(1.1)b of the FCCPA
Merger And Acquisition In Nigeria: The Legal Procedure And Guidelines – M&A/Private Equity – Nigeria https://share.google/I4dE7viVfkALT4XaT
Ibid(2)
sect 93(1) of fccpa
sect 94 of FCCPA
sect 86(4) & (5) of the fccpa
Regulation 3 of the FCCPC Administrative Penalties Regulations 2020
Regulation 6 of the FCCPC Administrative Penalties Regulations 2020
96(7) of the FCCPA
Sect 711(1) of Companies and Allied Matters Act (CAMA)
sect 711(2) of CAMA
sect 711(2-3) of CAMA
sect 711(4) of CAMA
sect 711(3)(v) of CAMA
sect 711(6) of CAMA
sect 140(1) of Investment and Securities Act (ISA) 2025
sect 140(3)of ISA
sect 141(1) of ISA
sect 141(5) of ISA
Ibid
sect 141(6) of ISA
sect 65 of Banks and Other Financial Institutions Act (BOFI) 2
section 7 of the BOFIA
section 7(3) of BOFIA