In a bid to make the process of merging easy for quoted companies, the Securities and Exchange Commission (SEC) is partnering with the Federal Competition and Consumer Protection Commission (FCCPC) to introduce new measures.
A statement made available to the public has confirmed that the acting Director-General, SEC, Mary Uduk, signed a Memorandum of Understanding (MoU) with the FCCPCC, to effect the simplified measures.
“We are happy with the work the FCCPC has done so far. On our part, as apex regulator of the capital market, we are willing to provide them with any relevant assistance they will need to hit the ground running and improve our nation’s economy,” the statement quoted the SEC boss.
On his part, the Director-General, FCCPC, Babatunde Irukera, said the partnership with SEC had helped the FCCPC to begin to get its bearing correctly and helped the investment community to see the real possibilities available in the country.
What this means: The capital market regulator seeks to adopt new measures with the FCCPC to simplify the procedures for companies to merge. The collaboration between the two organisations will extend the scope of the simplified merger procedure, reduce the information required in the merger filing, and at the same time, streamline the process for pre-notification discussions.
Why this matters: Corporate mergers can have a profound impact on the business world. Mergers occur when two or more businesses combine to create a new and larger business entity that combines the resources of the original companies. This process can go off without a hitch but this is not always the case. Businesses looking to combine their efforts may run into certain problems along the way.
What you should know: In accordance with the Federal Competition and Consumer Protection Act (FCCPA), which was signed into law on Wednesday, January 30, 2019, the SEC and FCCPC recently issued joint guidance on the submission of notifications for proposed mergers, acquisitions and other business combination notifications.
FCCPC, which replaced the Consumer Protection Council, is saddled with the responsibility of reviewing all mergers and business combinations in order to ensure that they do not impede or distort the market. Prior to the creation of FCCPC, the responsibility to review these transactions rested with SEC but was removed by FCCPA.