The new Statutory Instrument 126 of 2020 has been gazetted to address the financial aspects of the Notification of Mergers. It can be cited as the Competition (Notification of Mergers) Regulations 2020 “the Regulations”. Notification means a notification of a proposed merger made in terms of section 34A (1) of the Competition Act [Chapter14:28].

A “merger” is defined as the direct or indirect acquisition or establishment of a controlling interest by one or more persons in the whole or part of the business of a competitor, supplier, customer or other person whether that controlling interest is achieved as a result of the purchase or lease of the shares or assets of a competitor, supplier, customer or other person; the amalgamation or combination with a competitor, supplier, customer or other person; or any means other than as specified above. Merger applicants are required to give notice to the Competition Tariff Commission (CTC) in certain circumstances.

In light of the new SI 126 of 2020, the CTC must be notified of all mergers if the value of the proposed merger equals or exceeds the statutory threshold of ZWL$10 000 000.00 by either combining the annual turnover in or from Zimbabwe or combining the assets in Zimbabwe. This is provided for in section 5 of the Regulations. The notification filing fee is calculated as 0.5% of the combined annual turnover or combined value of assets in Zimbabwe of the merging parties. The minimum fee level is set at ZWL$100 000.00 and the maximum fee level at set at ZWL$800 000.00 respectively. It is important to note that section 6 and 7 provides for the methods of calculating annual turnover and assets. The Regulations also specify that the financial statements which will be used to calculate the turnover or assets of a company shall be audited financial statements of the immediate previous financial year and be prepared in terms of “International Accounting Standards” (IAS) and “International Financial Reporting Standards” (IFRS).

These Regulations repeals the following statutory instruments:

• Competition (Authorisation of Mergers) Regulations, 1999.
• Competition (Notification of Mergers) Regulations, 2002.
• Competition (Mergers Notification Thresholds) Regulations, 2002.
• Competition (Notification of Mergers) (Amendments) Regulations, 2007 (No. 3).
• Competition (Mergers Notification Thresholds) (Amendments) Regulations 2011 (No. 2).
• Competition (Notification of Mergers) (Amendments) Regulations 2011 (No.5).