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SA Poised to Follow Suit in Utilisation of Non-competition Merger Control to Protect State Security in Foreign Mergers

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A controversial introduction in the latest draft of the Competition Amendment Bill of 2018 is the inclusion of a section that requires the State President to constitute a standing committee of cabinet ministers and public officials to consider whether a merger, involving a foreign acquiring firm, will be adverse to national security interests in the country – with no reference to the proposed transaction’s bearing on the effect on competition in the relevant market. Such protective measures are not unique to South Africa. The United Kingdom has recently amended its laws to substantially lower the merger notification thresholds in certain industry sectors that have an effect on national security. Last week, they launched a consultation process regarding the intention to introduce new governmental powers to permit the scrutiny of the acquisition of assets if they raise national security concerns, even if the merger thresholds are not met.