Ethiopia’s merger rules are easy to underestimate. No single law governs an M&A transaction. The Trade Competition and Consumers Protection Proclamation No. 813/2013, Merger Directive No. 1/2016 and the Commercial Code Proclamation No. 1243/2021 work alongside investment, registration and sector rules. Competition approval does not satisfy the other requirements, and the other approvals do not replace it.
Approval comes first. A merger may not take effect before approval. Parties can sign a definitive agreement, but they should make completion conditional on clearance. A view that the deal has low competitive impact does not remove the duty to notify.
Size sets the process. The Directive sets three categories:
- Small: below ETB 30 million.
- Intermediate: ETB 30 million to ETB 300 million.
- Large: above ETB 300 million.
Intermediate and large mergers must be notified to the Ministry of Trade and Regional Integration (MoTRI) and assessed. Decision periods are 15 working days (extendable by 10) for intermediate mergers and 30 (extendable by 15) for large ones. Filings must be in Amharic or translated into Amharic.
The test is competition, not size. The question is whether the merger causes, or is likely to cause, a significant adverse effect on competition. Defining the relevant market is central to answering it.
COMESA adds another layer. Transactions that meet the regional thresholds may fall under the COMESA Competition and Consumer Commission’s one-stop-shop review rather than a separate Ethiopian clearance. Parties should work out early which regime applies.
Non-compliance is costly. Implementing a merger without the required approval can lead to an administrative fine of 5% to 10% of annual turnover. It can also lead to licence suspension or revocation. Our advice is to build regulatory review into the deal timetable and documents from the start.
The guide also includes a quick-reference table of thresholds and periods, MoTRI’s filing checklist and a glossary of key terms.
