Market Update

What Is a Look-Back Period in Merger Control? A look-back period is the time window within which a competition authority can take enforcement action against a merger completed without the required notification or approval. Once it expires, the authority generally loses the ability to challenge or unwind the transaction. The Position in Tanzania Mainland: Before and After the 2024 Amendments Before the 2024 Amendments Under the original Fair Competition Act, 2003, it was prohibited to give effect to a notifiable merger without filing a notification with the Fair Competition Commission (FCC) at least 14 days beforehand. The FCC was empowered to make compliance orders — including divestiture or voiding the acquisition — within three years after the acquisition. Additionally, the law provided a general six-year enforcement look-back under which the Commission could act upon any offence, including completing a merger without notification, within six years of its commission. After the 2024 Amendments Among the most significant changes was the deletion of the six-year look-back period. The FCC is no longer constrained by any statutory time limitation when pursuing enforcement action against unnotified mergers. It can now investigate and act against a merger completed without notification at any time, regardless of how many years have elapsed. Businesses that completed notifiable mergers without FCC approval — whether recently or many years ago — now face enforcement action with no statutory time bar. The Position in Zanzibar: A Defined Three-Year Window Zanzibar has its own competition law framework under the Fair Competition and Consumer Protection Act, 2018 (Act No. 5 of 2018), administered by the Zanzibar Fair Competition Commission (ZFCC). Under this framework, any merger that creates or strengthens a position of dominance distorting competition is prohibited. Notification to the ZFCC is required when at least one enterprise is established in Zanzibar and the resulting market share is likely to create market power. Critically, the law provides an enforcement mechanism for unnotified mergers: where the ZFCC is satisfied that shares or assets were acquired in breach of the merger prohibition, it may make an order at any time within three years after the acquisition, either requiring the acquirer to dispose of the shares or assets, or declaring the acquisition void and ordering the return of assets and refund of the acquisition price. Unlike Tanzania Mainland, Zanzibar has not amended this provision. The three-year look-back period remains in place. Once three years have passed from the acquisition date, the ZFCC can no longer order divestiture or void the transaction. What Can the ZFCC Do Within the Three-Year Window? Within this three-year window, the ZFCC may: (a) Investigate the transaction on its own initiative or at the request of any affected person. (b) Order divestiture of some or all shares or assets acquired. (c) Declare the acquisition void and order the return of assets to the vendor with a refund of the acquisition price. (d) Issue compliance orders requiring corrective actions or restraint from contravening conduct. (e) Impose penalties of TZS 1–5 million, up to one year imprisonment, or both. After three years, the ZFCC’s power to order divestiture or void an acquisition lapses — in stark contrast to Tanzania Mainland, where the FCC now has an unlimited enforcement window. Practical Implications for Businesses A. Tanzania Mainland: With no limitation period, any historical unnotified merger could be scrutinised. Businesses should consider proactively engaging with the FCC to regularise their position. B. Zanzibar: The three-year window should not be treated as an invitation to avoid notification. The ZFCC can unwind transactions entirely within that period, and non-compliance carries criminal penalties. C. Both jurisdictions: The merger control regimes are separate. FCC clearance does not extend to Zanzibar and vice versa. Businesses must ensure compliance with both regimes independently. Conclusion The 2024 amendments mark a significant tightening of merger control on the Mainland — the FCC now has an open-ended mandate to pursue unnotified mergers. In Zanzibar, the three-year window continues to apply, giving the ZFCC a defined but meaningful period to order divestiture or void unauthorised acquisitions. The divergence underscores the importance of understanding each jurisdiction's specific competition framework and ensuring full compliance with notification requirements.

Background to the Judgment The case concerned 08600 Africa (Pty) Ltd, a company incorporated in South Africa that was carrying on business in Tanzania. During labour proceedings before the Commission for Mediation and Arbitration (CMA), the company raised a preliminary objection that it could not be sued because it lacked a Certificate of Compliance under the Companies Act. The CMA upheld the objection, holding that the absence of the certificate meant the company did not legally exist and therefore could not be a party to proceedings. On revision, the High Court reversed the CMA’s decision. The Court held that: A. a foreign company derives its legal personality from the law of its country of incorporation, not from Tanzanian registration; B. section 437 of the Companies Act presupposes that the foreign company already exists before Tanzanian registration requirements arise—section 438 applies to an already existing foreign company; C. the Certificate of Compliance under section 439 is "conclusive evidence" of registration as a foreign company—it is not the source of the company’s corporate personality; D. section 446 prescribes the specific consequence for failure to comply with Part XII (a fine), and courts should not create additional, more drastic consequences that Parliament did not prescribe; and E. a foreign company that operates in Tanzania cannot invoke its own regulatory default as a shield against legal proceedings arising from acts, contracts, or employment relationships entered into in Tanzania. The Traditional Approach: Certificate of Compliance as Proof of Establishment Under Tanzanian competition law, a transaction is notifiable to the FCC if it results in a direct or indirect change of control of a business, part of a business, or assets in Tanzania, and the combined global asset or turnover value of the merging parties exceeds TZS 3.5 billion. A critical element of this analysis is whether the target (or any merging party) has an entity, branch, assets, or turnover in Tanzania. The general rule has been that a filing can be ruled out if the target has no entity, branch, assets, and turnover in Tanzania. In determining whether a foreign company has a "branch" or is "established" in Tanzania, practitioners have typically looked to the Certificate of Compliance as the dispositive piece of evidence. If the foreign company holds a Certificate of Compliance, it has established a place of business; if it does not, it has not. This approach has had real practical consequences. For example, in the context of the Zanzibar Fair Competition Commission’s inquiry into a particular transaction (involving the acquisition of shares in a certain locally operating company), the central argument for why the transaction was not notifiable in Zanzibar was that the target was not registered in Zanzibar at the time of completion and only obtained a certificate of compliance from the Zanzibar Registrar of Companies some seven months after the transaction completed. The certificate of compliance was thus treated as the determinative marker of when the entity became "established" in the jurisdiction. Why the Judgment Matters for Competition Law The High Court’s reasoning in Kimei undermines the assumption that the Certificate of Compliance is the sole or even the primary indicator of whether a foreign company has established a place of business in Tanzania. The Court made clear that: A. The certificate evidences registration, not establishment. The Court described the certificate as "conclusive evidence that the company is registered as a foreign company under the Act" but emphasised that it "is not expressed to be the instrument by which the company acquires its original corporate personality." By the same logic, the certificate is evidence of a company’s compliance with the registration obligation—it is not evidence that the company only began operating in Tanzania on the date the certificate was issued. B. Establishment precedes registration. Section 438 of the Companies Act requires a foreign company to register within thirty days of establishing a place of business. This means, by statutory design, that a foreign company will have been operating in Tanzania before it obtains a certificate. The Court’s holding reinforces this: it would be anomalous for a company to operate in Tanzania, employ persons, and enter into commercial relationships, yet claim it was not "established" simply because it had not completed the registration formality. C. Regulatory non-compliance cannot be used as a shield. The Court held that a foreign company cannot invoke its own failure to register as a defence against legal obligations arising from its Tanzanian operations. This principle is directly applicable to merger control: a foreign company that is in fact carrying on business in Tanzania cannot argue that it has no local nexus merely because it lacks a Certificate of Compliance. Practical Implications The judgment suggests that the analysis of whether a foreign company has a "branch" or "place of business" in Tanzania for competition law purposes should shift from a formalistic, document-based inquiry to a substantive, fact-based one. Going forward, the following factors are likely to become increasingly relevant: (A) Actual business operations. Whether the foreign company is, as a matter of fact, conducting business in Tanzania—hiring employees, entering contracts, generating revenue, maintaining physical or digital infrastructure—regardless of whether it has registered. (B) Revenue streams and distribution arrangements. Consistent with the FCC’s existing approach (as seen in the Toyota Tsusho Tribunal decision and subsequent FCC practice), even a revenue stream from Tanzania, a brand presence, or an exclusive distribution arrangement may suffice to establish local nexus. The Kimei judgment reinforces this by confirming that formal registration is not a precondition for legal existence or accountability. (C) Timing of establishment vs. registration. The date of the Certificate of Compliance can no longer be treated as the date on which a foreign company became "established" in Tanzania. The relevant date is when the company actually began carrying on business, which may predate registration by months or years. (D) Due diligence in M&A transactions. Acquirers and their advisers should look beyond the certificate register and conduct substantive due diligence on whether the target (or any party to the transaction) has actual operations, employees, assets, or revenue-generating activities in Tanzania, even in the absence of formal registration. Conclusion The Kimei judgment is a labour law decision, but its reasoning strikes at the heart of a longstanding assumption in Tanzanian merger control practice. The Certificate of Compliance under section 439 of the Companies Act has traditionally been treated as the benchmark for determining whether a foreign company has a branch or establishment in Tanzania—and, by extension, whether there is a local nexus sufficient to trigger a merger notification obligation. The High Court has now made clear that the certificate is merely evidence of registration compliance, not the marker of when a company began to exist or operate in Tanzania. This is consistent with the FCC’s own evolving practice of looking beyond formal corporate structures to actual economic presence.

The discussions reportedly covered merger regulation, filing fees, double notification challenges, and the strategic direction of the EAC Competition Authority, with a focus on strengthening cooperation and consistency in competition enforcement across Partner States. The meeting reaffirmed the Authority's position that a robust regional competition framework is essential to promoting competitive markets, attracting investment, and supporting sustainable economic growth across the EAC. Tanzania M&A Tracker Insight: The continued attention given to merger regulation and double notification issues signals an ongoing regional effort to improve coordination between national and EAC-level competition review processes. Businesses pursuing cross-border transactions in East Africa should continue to monitor developments that may affect merger filing requirements and regulatory approval timelines.

Is Your Transaction Notifiable? Understanding the Two-Prong Test Under the Fair Competition Act (FCA), a merger is notifiable to the Fair Competition Commission (FCC) if it meets two conditions: (1) it involves a change of control, and (2) it meets the financial threshold. Specifically, a merger is notifiable if the combined annual turnover or asset value (whichever is higher) of the merging parties during the previous financial year is equal to or greater than TZS 3.5 billion (approximately USD 1.6 million). Pre-Implementation Requirements: No Closing Without Approval The Competition Rules prohibit parties from implementing a notifiable merger until it has been approved by the FCC. When filing a merger notification application, parties must also submit an undertaking confirming they will not implement the proposed transaction until FCC approval is obtained. Key Definitions Under Section 2 of the FCA Section 2 of the FCA defines several key terms. A "merger" means "an acquisition of shares, a business or other assets, whether inside or outside Tanzania, resulting in the change of control of a business, part of a business or an asset of a business in Tanzania." An “acquisition” is defined as, “in relation to shares or assets means acquisition, either alone or jointly with another person, of any legal or equitable interest in such shares or assets but does not include acquisition by way of charge only.” What Constitutes a "Change of Control" in Tanzania? Notably, there is no statutory definition of "change of control" under Tanzanian competition law. However, the FCC Tribunal provided critical guidance in the landmark case of Toyota Tsusho Corporation (Alliance Autos Ltd) v. FCC, Appeal No. 6 of 2013. The Tribunal held that change of control means a situation where one party acquires the possibility of exercising significant or decisive influence on the decision-making process of the company. Such influence may arise from ownership of all or part of the company's assets, shares, or rights. The FCC will assess whether the purchasing party has acquired the potential ability to materially influence the business policy and operations of the target in the post-merger scenario, irrespective of the size of ownership change. How the FCC’s Approach to Change of Control Has Evolved Historically, the FCC took a very broad view of the change of control provision. This resulted in virtually all changes in shareholding, both direct and indirect, being notifiable if the financial threshold was met, regardless of the size of shareholding concerned. Even internal restructurings where the ultimate ownership of a corporate group did not change were deemed notifiable. However, over the last few years, there has been a favorable shift in the FCC's interpretation, particularly for internal restructurings. In several recent opinions involving transactions that did not result in an appreciable shift in the concentration of decision-making power, the FCC determined that such mergers were not notifiable. These decisions suggest a softening of approach compared to the FCC's historical hard stance. Minority Acquisitions: When Do They Trigger a Notification? In FCC v. Mo Simba and Simba Sports Club (2021), the FCC emphasized that the acquisition of minority shares may amount to a notifiable merger only if it entails a change of control or confers special rights on minority shareholders, such as veto powers or influence over strategic decisions. A merger that results in the acquisition of a minority interest or shifts a jointly controlled entity to sole control may therefore meet the mandatory notification requirement. Influence From International Best Practices The FCC's position on minority acquisitions is inspired by international best practices. The European Commission's approach requires that minority acquisitions be assessed if they confer "decisive influence" on the acquiring firm. Only minority acquisitions that allow substantial influence over the target company's strategic decisions are reviewed. The European Commission considers whether the acquisition provides veto rights, board representation, or other rights that permit influence over critical decisions. Similarly, the FCC's decisions are persuasively influenced by South African competition law, where the South African Competition Commission requires notification if a minority stake affords "significant influence" over the target's policies or strategic direction. Key Takeaways for Businesses Operating in Tanzania If you are considering a merger, acquisition, or restructuring that involves a Tanzanian business, here are the essential points to keep in mind: • Check both prongs. A transaction is notifiable only if it involves a change of control and meets the TZS 3.5 billion financial threshold. • Do not close before approval. Parties must obtain FCC approval and submit a non-implementation undertaking before completing the transaction. • Change of control is broadly interpreted. While the FCC's approach has softened in recent years, even minority acquisitions and internal restructurings may trigger notification requirements depending on the circumstances. • Seek early legal advice. Given the evolving nature of the FCC's interpretation, it is advisable to obtain legal guidance early in the transaction process to determine whether notification is required. This article is for informational purposes only and does not constitute legal advice. For specific guidance on merger notification in Tanzania, please contact our team.

Before the Fair Competition (Amendment) Act, 2024, a person was deemed dominant if they could profitably restrain competition for a significant period of time and held a market share exceeding 35%. The law did not list specific acts amounting to abuse and Section 10 only provided a general prohibition against using a dominant position in a way that would prevent, restrict, or distort competition. The 2024 Amendments, which came into effect on 11 October 2024, introduced key changes: the concept of joint dominance, an increase of the dominance threshold from 35% to 40%, and a specific list of twelve acts constituting abuse of a dominant position. However, several of these acts were left undefined, and no guidance was provided on how the FCC would assess them. What the 2026 Regulations Introduce On 14 August 2026, the Government published Government Notice No. 244, introducing the Fair Competition (Abuse of Dominant Position) Regulations, 2026. Made under Section 99 of the Fair Competition Act, these Regulations operationalise the 2024 Amendments by providing detailed criteria, definitions, and analytical frameworks for determining dominance and evaluating each form of abuse. Determining Dominance (Regulation 3) The Regulations set out specific factors the FCC must consider when determining whether a person holds a dominant position. These include whether the person’s market share exceeds 40% for a significant period, customer or supplier reliance on the person’s goods or services, the person’s ability to set prices independently of competitors, countervailing buyer power, competition from imports, control over essential inputs or facilities, and barriers to entry such as economies of scale, transport costs, or government regulation. Market Assessment (Regulation 4) The FCC is now required to define the relevant market by assessing both the product market and the geographic market, formalising a structured approach that was previously left to the FCC’s discretion. Twelve Forms of Abuse Now Defined The Regulations provide detailed assessment criteria for the twelve forms of abuse listed in the 2024 Amendments: Unfair Trading Conditions (Regulation 6) – Covers exploitative pricing, imbalanced contractual terms, excessive obligations, and unilateral alteration of key terms. Where cost data is unavailable, the FCC may rely on cross-market price comparisons. Predatory Pricing (Regulation 7) – Prices set below cost for a sustained period with the likelihood of recouping losses through future price increases. Margin Squeeze (Regulation 8) – Where a vertically integrated dominant firm charges downstream prices that prevent efficient competitors from trading profitably. Notably, dominance does not need to be demonstrated in the downstream market. Cross-Subsidisation (Regulation 9) – Internal cost-shifting between business lines resulting in below-cost pricing that harms competitors or consumers. Refusal to Deal (Regulation 10) – Unjustified denial of dealing that restricts or distorts competition. Denial of Access to Essential Facility (Regulation 11) – Where a dominant firm controls infrastructure or resources that cannot reasonably be duplicated and denies access without justification. Tying and Bundling (Regulation 12) – Requiring customers to purchase additional products as a condition for buying a primary product, where this restricts competition without sufficient efficiency gains. Price Discrimination (Regulation 13) – Charging different prices to different customers for the same product without cost justification. Loyalty Discounts or Rebates (Regulation 14) – Discount schemes with exclusionary effects that restrict competition. Abuse of Intellectual Property Rights (Regulation 15) – Covers unjustified refusal to license, excessive royalty rates, discriminatory licensing, strategic patent filing (“patent thickets”), and sham litigation. Unrelated Supplementary Conditions (Regulation 16) – Making agreements conditional on accepting obligations unrelated to the core subject matter of the agreement. Key Definitions Introduced The 2026 Regulations formally define key terms that were previously undefined: Bundling – Products offered jointly (pure bundling) or separately at a higher combined price (mixed bundling). Essential Facility – Any infrastructure, resource, raw material, or service critical for market functioning that cannot reasonably be duplicated. Predatory Pricing – A deliberate pricing strategy below cost aimed at eliminating equally efficient competitors. Tying – Requiring a customer who purchases one product to also purchase another from the dominant firm. Why It Matters These Regulations represent a landmark step in Tanzania’s competition law framework. They bring greater predictability and transparency to enforcement, filling a gap that existed even after the 2024 Amendments. Businesses operating in Tanzania should take note of several practical considerations: (a) Companies with market shares approaching or exceeding 40% should assess their competitive position against the structured factors in Regulation 3, considering both individual and joint dominance. (b) Pricing structures, contractual terms, discount schemes, IP licensing practices, and distribution arrangements should be reviewed for potential exposure under the twelve specific forms of abuse. (c) Businesses controlling infrastructure or resources qualifying as “essential facilities” face strict obligations regarding access and risk findings of abuse if access is denied without justification. (d) Internal competition compliance programs should be updated to reflect the specific forms of abuse and assessment criteria now set out in the 2026 Regulations. The 2026 Regulations close a significant chapter in the evolution of Tanzania’s competition law. While the FCC’s approach to enforcement and interpretation will become clearer over time, businesses are strongly encouraged to align their practices with the new framework proactively.

If a merger is never notified to the FCC, how does the Commission find out about it? The FCC does not rely solely on voluntary disclosures, complaints, or media reports. It actively cross-checks corporate records held by the Business Registrations and Licensing Agency (BRELA). According to the Budget Speech, the FCC, in collaboration with BRELA, screened a total of 1,214 companies recorded in the Register of Companies as of April 2026. The stated purpose was to verify whether companies that had changed their ownership or control structure had done so without undermining compliance with the Fair Competition Act's merger control provisions. What Does the FCC Review? In practice, the FCC can examine filings submitted to BRELA, including: • Share transfers; • Changes in shareholding structures; • Share allotments; • Changes in directors; • Changes in beneficial ownership; and • Other filings that may indicate a change in control. The FCC then assesses whether the transaction satisfies Tanzania's merger notification requirements, namely: 1. A change of control, and 2. The applicable merger notification threshold, currently based on a combined turnover or asset value of at least TZS 3.5 billion. Where a transaction appears to meet these requirements but was not notified to the FCC before implementation, it may be flagged for further review. Can the FCC Discover an Unnotified Merger Without a Complaint? Yes. The FCC's review of BRELA records demonstrates that it does not depend solely on: • Competitor complaints; • Whistleblowers; • Market intelligence; or • Media announcements. Instead, the Commission can independently identify transactions from corporate filings submitted as part of ordinary company compliance obligations. This significantly reduces the likelihood that a qualifying merger will go unnoticed. What Happens After the FCC Flags a Transaction? Once a transaction is identified, whether through BRELA records or another source, the FCC will typically contact the parties involved, particularly the target company. The parties may be asked to provide information regarding: • The transaction structure; • How ownership or control changed; • The financial position of the parties at the relevant time; and • The reasons why the transaction was not notified before implementation. This stage is critical: the parties’ explanation may influence whether the matter proceeds as a routine (if late) notification or escalates into a formal investigation. Specifically, the matter may proceed as: • A late merger notification with potential gun-jumping implications; or • A formal investigation that could lead to enforcement action. The FCC Actively Follows Up on Unnotified Deals The available data indicates that the FCC does not simply identify potential violations and leave them unresolved. Of the 38 unnotified merger cases recorded as of April 2026: • 4 cases had reached final decisions; • 18 cases had preliminary decisions; and • 16 cases remained under investigation. These figures demonstrate that the Commission actively pursues matters once they have been identified. Why This Matters: The Penalties Are Not Trivial Detection is only half the story. Under section 60(1) of the Fair Competition Act, 2003, read together with the Finance Act, 2020, a party that implements a merger without FCC approval risks an administrative penalty of between 5% and 10% of the merging parties' combined annual turnover in mainland Tanzania. Where the FCC can quantify harm suffered by an affected person, the offending party may also be ordered to pay that person twice the quantified amount, on top of the administrative penalty. The FCC's powers do not stop at fines. Where an acquisition is found to have created or strengthened a dominant position in breach of the Act, the FCC can order divestiture, declare the transaction void, and require shares or assets to be unwound and returned to the original owner. Since the Fair Competition (Amendment) Act came into force on 11 October 2024, there is no longer any time limit within which the FCC can make such an order, meaning a deal completed years ago remains exposed. Key Takeaway for Businesses and Investors A common misconception is that an unnotified merger will remain undetected if the parties do not voluntarily approach the FCC. The FCC’s collaboration with BRELA suggests otherwise. Because share transfers, ownership changes, director appointments, and other corporate actions are routinely filed with BRELA, a change of control is often visible to regulators even where no merger notification is submitted. The practical lesson is that proceed on the assumption that any transaction meeting Tanzania's merger notification thresholds will eventually surface on the FCC's radar, whether through BRELA, a competitor, or the media. Getting merger control advice before signing is a fraction of the cost, in money and management time, of explaining an unnotified deal to the FCC after the fact.

Introduction Tanzania’s deal market is booming, but a growing number of mergers are closing without the regulatory sign-off the law requires, and the numbers tell a striking story. As of April 2026, unnotified mergers accounted for 38 of the 43 competition-related cases handled by the Fair Competition Commission (FCC), a stark illustration of how compliance is failing to keep pace with deal volume. This is according to the Budget Speech delivered by the Minister of Industry and Trade to the National Assembly for the fiscal year 2026/2027, presented on 22 May 2026 and covering data up to April 2026. In this article, I focus on this growing number of unnotified mergers and acquisitions (M&As) and what it means for deals relating to Tanzania. M&As are complex transactions that can significantly impact businesses and markets. In Tanzania, the Fair Competition Act, 2003 (FCA) and the Competition Rules, 2018 regulate these transactions to ensure fair competition and protect consumer interests. Failing to comply with these regulations can lead to severe penalties, including hefty fines and personal liability for directors and officers. In Tanzania, there are two-pronged tests to determine whether an M&A transaction requires approval. These are: (a) change of control; and (b) the financial threshold (i.e., a merger is notifiable to the FCC if the merging parties’ combined annual turnover or asset value, whichever is higher, during the previous financial year is equal to or greater than TZS 3.5 billion (approx. USD 1.6 million)). The Competition Rules provide that the parties to a merger may not implement a notifiable merger until it has been approved. Along with the merger notification application/form to be submitted to the FCC, the parties are required to provide an undertaking to the FCC indicating that the parties will not implement the proposed transaction until approval from the FCC is obtained. It is therefore essential to engage a legal advisor to assess these tests before formally advising on whether the transaction in question requires competition clearance. Market Trend: Uncleared Mergers According to the Budget Speech for the Ministry of Industry and Trade, presented to the National Assembly for the fiscal year 2026/2027, as of April 2026, the FCC had handled a total of 43 competition-related cases. Of these, 38 concerned mergers that were implemented without prior FCC approval, while 5 concerned abuse of market power. Among the 38 unnotified merger cases, final decisions had been issued in 4, preliminary decisions had been issued in 18, and 16 remained under investigation. This trend indicates that failure to notify the FCC of notifiable mergers continues to be a critical compliance issue. The FCC is actively investigating such transactions and taking corrective measures to ensure parties adhere to the legal framework. In addition, as of April 2026, the FCC had handled a total of 62 merger applications, of which 37 were approved unconditionally and 4 were approved subject to specific conditions. The applications originated from the following sectors: S/N Sector Number of mergers 1 Agriculture 6 2 Manufacturing 13 3 Insurance 8 4 Health 4 5 Land and Housing 2 6 Sports 4 7 Mining 5 8 Construction 1 9 Tourism 3 10 Communications 4 11 Banking 2 12 Transport 6 13 Energy 4 In addition, the remaining 21 applications are still in various stages of review and are expected to be decided in the fourth quarter of the 2025/2026 financial year. These developments demonstrate the FCC’s sharpened focus on enforcement and its commitment to promoting transparency, fairness, and competition in Tanzania’s economy. Businesses are strongly encouraged to conduct proper merger clearance assessments and engage the FCC proactively to avoid regulatory risk. As a note, according to the budget speech for the financial year 2025/2026, the FCC had handled 16 cases of uncleared mergers as of that reporting period. Conversely, based on the 2026/2027 budget speech, as of April 2026 the FCC had handled 38 cases involving mergers implemented without prior approval. This represents a substantial increase in such cases compared to the previous year, reinforcing the trend of rising non-compliance with merger notification requirements. Penalties for Implementing an M&A Deal Without Competition Clearance In terms of section 60(1) of the FCA, read together with the Finance Act, 2020, parties that implement a merger without obtaining approval from the FCC risk attracting an administrative penalty of between 5% and 10% of their combined annual turnover derived from sources in mainland Tanzania. Under Section 60(2) of the FCA, if the FCC can reasonably quantify the damage (e.g. financial harm or loss of income) suffered by a person due to an offence, such as gun-jumping, the convicted party may be required to pay twice that amount to the affected person, in addition to other penalties. Furthermore, where the FCC is satisfied that a person has acquired shares or other assets, and that the acquisition created or strengthened a dominant position in contravention of the FCA, it may make a compliance order at any time after the acquisition, requiring the acquirer to dispose of some or all of the shares or assets; declaring the acquisition void and requiring the acquirer to transfer some or all of the shares or assets back to the vendor; and requiring the vendor to refund to the acquirer all amounts received in respect of the acquisition. Please note that the Fair Competition (Amendment) Act, enacted on 11 October 2024, deleted the provision that limited the FCC from making certain orders, such as declaring a transaction void or requiring the acquirer to transfer some or all of the shares or assets back to the original owner, within a three-year period. In light of this amendment, there is now no time limit within which the FCC can unwind a transaction. Conclusion Before initiating, transferring, or executing any M&A transaction, it is essential to consult experienced legal advisors or seek an advisory opinion from the FCC to determine whether the proposed transaction requires competition clearance. Early engagement helps identify and address potential competition law concerns, avoid delays, and ensure full compliance with applicable legal and regulatory requirements.

Overview: Union Set-Up Not to unveil the debate on whether Tanzania has a perfect Union, properly so called, or not, the Constitution of the United Republic of Tanzania, Cap. 2 [R.E. 2002] (the “Constitution”) provides that there shall be a Government of the United Republic, which shall have authority over all Union Matters throughout the United Republic and over all other matters concerning Mainland Tanzania. The Constitution further stipulates that there shall be an Executive for Zanzibar, known as the Revolutionary Government of Zanzibar, which shall have authority in Zanzibar over all matters that are not Union Matters, in accordance with the provisions of the Constitution. Importantly, the Constitution also declares that “the territory of the United Republic consists of the whole of the area of Mainland Tanzania and the whole of the area of Tanzania Zanzibar, and includes the territorial waters.” This territorial definition reinforces the fact that, while Tanzania comprises two constituent parts, Mainland Tanzania and Zanzibar, it remains a single sovereign state with clearly demarcated Union and non-Union competences. Put simply, Tanzania is composed of Mainland Tanzania and Zanzibar. Certain shared matters, known as Union Matters, fall under the jurisdiction of the Government of the United Republic, while non-Union Matters are governed separately: by the Government of the United Republic in respect of Mainland Tanzania and by the Revolutionary Government of Zanzibar in respect of Zanzibar. Fortunately, the list of Union Matters is not a matter of guesswork. The Constitution specifies 22 items that qualify as Union Matters. Technically, if a subject does not fall within this list, it is treated as a non-Union matter. Under the Constitution, these Union Matters include the following. 1. The Constitution of Tanzania and the Government of the United Republic. 2. Foreign Affairs. 3. Defence and Security. 4. Police. 5. Emergency Powers. 6. Citizenship. 7. Immigration. 8. External borrowing and trade. 9. Service in the Government of the United Republic. 10. Income tax payable by individuals and by corporations, customs duty and excise duty on goods manufactured in Tanzania collected by the Customs Department. 11. Harbours, matters relating to air transport, posts and telecommunications. 12. All matters concerning coinage and currency for the purposes of legal tender (including notes), banks (including savings banks) and all banking business; foreign exchange and exchange control. 13. Industrial licensing and statistics. 14. Higher education. 15. Mineral oil resources, including crude oil other categories of oil or products and natural gas. 16. The National Examinations Council of Tanzania and all matters connected with the functions of that Council. 17. Civil aviation. 18. Research. 19. Meteorology. 20. Statistics. 21. The Court of Appeal of the United Republic. 22. Registration of political parties and other matters related to political parties. As our subject matter is competition, the next issue to address is whether competition constitutes a Union Matter or not, and the resulting implications depending on whether it is classified as a Union Matter or a non-Union matter. Competition: A Union Matter or Not? A close look at the list above suggests that the only item that appears to relate to competition is item 8 of the Union Matters, namely “...trade.” However, since competition is not specifically mentioned, it follows that it is excluded from the list and therefore cannot be deemed a Union Matter in the same way as those expressly listed. Implications of Competition Not Being a Union Matter Since, constitutionally, competition is not a Union Matter, it follows that it must be regulated separately by the Government of the United Republic (for Mainland Tanzania) and the Revolutionary Government of Zanzibar. For this reason, both Mainland Tanzania and Zanzibar maintain their own distinct competition frameworks, including separate systems for regulating competition and merger control. Accordingly, this article aims to unveil the differences in approach to merger control between Mainland Tanzania and Zanzibar, as detailed below. In short, beyond the divergence in legal frameworks, the institutional structures also differ. Whereas in Mainland Tanzania the regulator is the Fair Competition Commission (“FCC”), in Zanzibar the responsible authority is the Zanzibar Fair Competition Commission (“ZFCC”). From a historical perspective, it is reasonable to observe that Mainland Tanzania has a more mature merger control framework compared to Zanzibar. This is evident from the fact that the FCC began its operations earlier than the ZFCC, giving the Mainland system more time to develop its institutional capacity, jurisprudence, and enforcement practice. Merger Control Framework: Tanzania Mainland Merger control framework is mainly premised from the Fair Competition Act, Cap. 285 [R.E. 2023] (the “FCA”). The FCA, and the Competition Rules, 2018 (the “Competition Rules”), set out a two-pronged test to determine if a “merger” is notifiable to the FCC. All these tests must be met for a transaction to be considered a notifiable merger: (a) Change of control – the transaction must involve a change of control of a business or assets in Tanzania; and (b) Financial threshold – the combined global turnover or asset value, whichever is higher, of the merging parties must meet or exceed a set threshold. Change of Control The FCA defines a “merger” as, “an acquisition of shares, a business or other assets, whether inside or outside Tanzania, resulting in the change of control of a business, part of a business or an asset of a business in Tanzania.” An “acquisition” is defined as, “in relation to shares or assets means the acquisition, either alone or jointly with another person, of any legal or equitable interest in such shares or assets but does not include acquisition by way of charge only.” Further, the word “acquire” is defined to include acquire by purchase, exchange, lease, hire, hire-purchase or gift. Although change of control is not specifically defined under Tanzanian law, the FCC takes a broad view. It considers change of control as any situation where a party gains significant or decisive influence over the target's assets or operations. Such an influence may arise through the ownership of all or part of the company’s assets, shares, or rights, which confer decisive influence on the decision-making process of the company. In a scenario where a third-party acquirer is involved, there will typically be a change of control over a business or part of a business in Tanzania in terms of the third-party acquirer’s potential ability to materially influence the business policy and operations of the Tanzanian target in the post-merger scenario, irrespective of the size of the ownership change. Consequently, the nature of such a transaction results in a change of control. Financial Threshold A merger is notifiable to the FCC if the merging parties’ combined global annual turnover or asset value (whichever is higher) during the previous financial year equals or exceeds TZS 3.5 billion (approximately USD 1.6 million). Since the threshold is calculated on a global basis, if either party (the target or the acquirer) meets the financial threshold, then the proposed transaction triggers the notification requirement. Merger Control: Zanzibar The Fair Competition and Consumer Protection Act, 2018, together with the Fair Competition Regulations, 2019 in Zanzibar, closely mirror the Tanzanian Mainland’s merger control framework, particularly in defining what constitutes a merger or acquisition and the criteria for a notifiable merger. Under this regime, a merger is notifiable if it satisfies the following two tests: (a) Change of control test; and (b) Financial threshold test. The change of control test focuses on whether the transaction results in one party gaining the ability to exercise material or decisive influence over another entity’s operations or strategic decisions. This can occur through shareholding, voting rights, or contractual arrangements, even if the acquiring party does not obtain majority ownership. The financial threshold test in Zanzibar is notably more stringent than that of Mainland Tanzania. A merger must be notified to the ZFCC if the combined global annual turnover or asset value of the merging parties in the preceding financial year equals or exceeds TZS 500,000,000 (approximately USD 206,611.57). Compared to the TZS 3.5 billion financial threshold required for a notifiable merger in Mainland Tanzania, the TZS 500,000,000 threshold is significantly lower, meaning that almost every transaction that results in a change of control is likely to trigger a mandatory notification to the ZFCC. Conclusion Where the target entity has a physical presence or business arrangements (such as distributorships or agency relationships) that establish a nexus in Zanzibar, Tanzania, or both, the parties may need to undertake a merger control analysis to confirm whether the proposed transaction, whether occurring offshore or onshore, triggers the notification requirements in Tanzania, Zanzibar, or both.

Background A frequently asked question under Tanzania’s competition regime is whether the acquisition or transfer of even a single share requires approval from the Fair Competition Commission (FCC). Some parties tend to overlook this issue, assuming that the transfer of just one share is too minor to trigger regulatory scrutiny. While this assumption may hold true in certain cases, it is not universally true, particularly where the acquiring party is a third party (i.e., a prospective buyer who is not already directly or indirectly involved in the company). Regardless of the size or number of shares being transferred, competition approval may be required if the thresholds or conditions set out below are met. Please note that if competition approval is required, the parties to the transaction are not permitted to implement the transaction until approval has been granted by the FCC. Failure to comply with this requirement may expose the parties to penalties under Tanzanian competition law. Applicable Tests/Conditions The competition law in Tanzania sets out a two-pronged test (both of which must be met) to determine whether a “merger” is notifiable: (a) Change of Control Test; and (b) Financial Test. Regarding the Financial Test, a merger is notifiable to the FCC if the combined annual turnover or asset value of the merging parties, whichever is higher, during the preceding financial year is equal to or exceeds TZS 3.5 billion (c. USD 1.6 million). The law defines a “merger” as the acquisition of shares, a business, or other assets, whether inside or outside Tanzania, that results in a change of control of a business, part of a business, or an asset of a business in Tanzania. It further defines an “acquisition” in relation to shares or assets as the acquisition, either alone or jointly with another person, of any legal or equitable interest in such shares or assets. However, this definition expressly excludes acquisitions made solely by way of charge. As for Change of Control Test, there is no statutory definition of “Change of Control” under Tanzanian competition law. However, the Fair Competition Tribunal decided in the landmark case of Toyota Tsusho Corporation (Alliance Autos Ltd) v. FCC, Appeal No. 6 of 2013, that change of control means a situation where one party acquires the possibility of exercising significant or decisive influence on the decision-making process of the company. Such an influence may arise by the ownership of all or part of the company’s assets, shares or rights. In conducting its analysis, the FCC will review whether the purchasing party has acquired the potential ability to materially influence the business policy and operations of the target in the post-merger scenario, irrespective of the size of ownership change. In FCC v. Mo Simba and Simba Sports Club (2021), the FCC emphasized that the acquisition of minority shares may amount to a notifiable merger only if it entails a change of control or confers special rights on minority shareholders, such as veto powers or influence over strategic decisions. A merger that either results in the acquisition of a minority interest or shifts a jointly controlled entity to sole control may, therefore, meet the mandatory notification requirement. This position by the FCC is inspired by the European Commission’s approach, where minority acquisitions are assessed if they confer “decisive influence” on the acquiring firm. Only minority acquisitions that allow substantial influence over the target company’s strategic decisions are reviewed. The European Commission considers whether the acquisition provides veto rights, board representation, or other rights that permit influence over critical decisions. FCC’s decision on transactions that involve minority acquisitions is also persuasively influenced by the South African competition law where the South African Competition Commission requires notification if a minority stake affords “significant influence” over the target’s policies or strategic direction. Conclusion To conclude, before implementing any share transfer transaction, it is essential to consult an experienced M&A legal advisor or firm for guidance. This will help you avoid potential penalties in cases where the FCC may invoke various enforcement provisions under Tanzanian competition law. As a note, under the 2024 amendments to the Fair Competition Act, the FCC now has the authority to investigate transactions without any time limitation (previously this was capped at 6 years), which reflects a broader regulatory trend toward stricter enforcement. Failure to notify a notifiable transaction may result in substantial penalties, including fines of up to 10% of the combined annual turnover of the merging parties.

Introduction: A New Era for Cross-Border Merger Filings in East Africa In the merger and acquisition space, a significant milestone is upon us. The East African Community Competition Authority (“EACCA”) has officially commenced accepting merger applications for approval. As explained below, EACCA began receiving merger filings effective 1 November 2025, marking the start of a new regulatory chapter for cross-border transactions in the East African Community ("EAC"). This development has far-reaching implications for businesses, investors, and legal practitioners operating across the region. This development raises important questions about the role of national competition authorities — specifically, the Fair Competition Commission (“FCC”) in Mainland Tanzania and the Zanzibar Fair Competition Commission (“ZFCC”). What are the filing requirements going forward? Will parties be required to submit triple merger notifications to the EACCA, FCC, and ZFCC? Or will double or even single notifications suffice? Understanding these interfaces is critical for any party contemplating a merger or acquisition with an East African dimension. The EACCA: Mandate and Commencement of Merger Filings Via the East African Community Gazette dated 1 July 2025 (Legal Notice No. EAC/191/), the EACCA issued a general notice of commencement of receipt of notifications of mergers and acquisitions with cross-border effect. According to the notice, the EACCA commenced receiving mergers and acquisitions applications and notifications under the East African Community Competition Act, 2006 from 1 November 2025. The EACCA is an independent organ of the EAC. The EAC is a regional intergovernmental body composed of eight partner states: Burundi, Kenya, Rwanda, Tanzania, Uganda, South Sudan, the Democratic Republic of Congo, and Somalia. The EACCA is tasked with developing appropriate procedures for public awareness, consultation, and participation. Its objective is to enhance the analysis of cross-border mergers and acquisitions while preventing any anti-competitive impacts resulting from such transactions. According to Article 21(1) of the Customs Union Protocol and Article 33(1) of the Common Market Protocol, EAC Member States are required to prohibit any practices that negatively affect free trade, including agreements or actions aimed at preventing, restricting, or distorting competition. These prohibitions apply to mergers or acquisitions that create or strengthen a dominant position, thereby significantly impeding effective competition within the EAC or a substantial part of the EAC Member States. What Mergers Are Notifiable to the EACCA? Under the East African Community Competition Act, 2006, a merger or acquisition transaction with cross-border implications must be reported to the EACCA if it meets the following notification thresholds: (a) the combined turnover or assets of the merging undertakings in the EAC, whichever is higher, reaches or exceeds USD 35 million; and (b) at least two undertakings involved in the merger or acquisition have a combined turnover or assets of USD 20 million within the EAC — unless each party to the merger achieves at least two-thirds of its aggregate turnover or assets in the EAC within a single Member State. What Mergers Are Notifiable in Tanzania? The Fair Competition Act, Cap 285 R.E 2023 (the “FCA”), and the Competition Rules, 2018 (the “Competition Rules”), set out a two-pronged test (both of which must be met) to determine if a merger is notifiable to the FCC: A. Change of control – the transaction must involve a change of control of a business or assets in Tanzania; and B. Financial threshold – the combined turnover or asset value, whichever is higher, of the merging parties must meet or exceed a set threshold. What Constitutes a Change of Control? The FCA defines a “merger” as, “an acquisition of shares, a business or other assets, whether inside or outside Tanzania, resulting in the change of control of a business, part of a business or an asset of a business in Tanzania.” Although change of control is not specifically defined under Tanzanian law, the FCC takes a broad view. It considers change of control as any situation where a party gains significant or decisive influence over the target's assets or operations. What is the Financial Threshold for Merger Notification in Tanzania? A merger is notifiable to the FCC if the merging parties' combined annual turnover or asset value (whichever is higher) during the previous financial year is equal to or greater than TZS 3.5 billion. In practice, the FCC assesses this based on the combined worldwide turnover of the parties, which means that almost all merger transactions are notifiable. Does the Target Need a Presence in Tanzania? Under Tanzanian competition law, a merger is defined as the acquisition of shares, a business, or other assets, whether inside or outside Tanzania, that results in a change of control over a business or its assets in Tanzania. The requirement to notify the FCC only arises where the transaction leads to a change of control in Tanzania. This includes situations where the target has a presence or nexus in Tanzania, either directly or through business arrangements such as distributorship agreements. Where the target entity has no physical presence in Tanzania and no business arrangements (such as distributorships or agency relationships) that would establish a nexus in the country, the proposed offshore transaction is unlikely to result in a change of control over any business or assets in Tanzania, in which case it would not be notifiable in Tanzania even though the combined turnover or asset value is above TZS 3.5 billion (approx. EUR 1.30 million)). It would be necessary to assess how the target is deriving turnover in Tanzania (e.g. how the sales are made, the frequency of the sales etc). If the two thresholds mentioned above are met and provided that the target has a presence in Tanzania as outlined, we have observed that the FCC has increasingly sought to impose penalties on parties that fail to comply with merger notification requirements. Accordingly, the likelihood of the FCC conducting an investigation is higher. Notably, under the 2024 amendments to the Fair Competition Act, the FCC now has the authority to investigate transactions without any time limitation (previously this was capped at 6 years), which reflects a broader regulatory trend toward stricter enforcement. Failure to notify a notifiable transaction may result in substantial penalties, including fines of up to 10% of the combined annual turnover of the merging parties. How Does the EACCA Interface with the FCC? The FCC administers Tanzania’s local competition regime, which operates under thresholds that differ from those of the EACCA. Similar to the EACCA regime, transactions may not be implemented in Tanzania until clearance is obtained from the FCC. Currently, Tanzania’s competition framework does not provide for formal coordination with the EACCA. As a result, transactions with a cross-border effect are subject to dual notifications, to both the FCC and the EACCA. However, based on regional practice, it is anticipated that the FCC may cede jurisdiction to the EACCA where EACCA thresholds are triggered, in order to avoid overlapping reviews and regulatory duplication. Has the FCC Formally Ceded Jurisdiction to the EACCA? On 1 November 2023, the EACCA and FCC signed a Memorandum of Understanding (“MoU”) aimed at enhancing cooperation in the enforcement of competition laws. However, the MoU does not address how the two authorities will handle merger filings with cross-border implications. Technically, the MoU does not constitute formal acceptance of EACCA’s jurisdiction over mergers in Tanzania. As at the date of this article, the FCC has not formally recognized EACCA’s authority over mergers and acquisitions affecting Tanzania. Consequently, any transaction with a cross-border effect remains subject to dual filings, with both the FCC and the EACCA. In this context, the FCC’s directives regarding jurisdictional acceptance, whether through public notice or other forms of communication, are critical during this interim period. This is especially important ahead of any amendments to the Tanzanian Competition Act that would formally recognize EACCA’s jurisdiction. Such amendments may take time, as they must be passed by Parliament, which has currently been dissolved. Recommended Way Forward: Practical Steps for Merging Parties In the interim, prior to the issuance of a public notice or any other formal communication from the FCC, parties to a cross-border merger may wish to obtain an official written response from the FCC. This could take the form of a confirmatory letter requesting the FCC to confirm whether a filing with the EACCA alone would be deemed sufficient. This approach provides an added layer of regulatory comfort, as the confirmation would be issued directly by the FCC and may serve as evidence of good faith compliance. How Does the EACCA Interface with the ZFCC in Zanzibar? Tanzania comprises Mainland Tanzania and Zanzibar. While Tanzania represents both parts of the union in international affairs, the Constitution of Tanzania does not list competition as a union matter. As a result, the FCC does not exercise jurisdiction over mergers and acquisitions in Zanzibar. In this context, the ZFCC must separately accept EACCA’s jurisdiction, and corresponding amendments to Zanzibar’s competition laws would be required. At present, we are not aware of any formal steps taken by the ZFCC to cede jurisdiction to the EACCA for transactions with a cross-border effect that extend to Zanzibar. In the absence of formal jurisdictional acceptance and legal amendments, any transaction involving Zanzibar may also be subject to dual notifications — to both the ZFCC and the EACCA. Conclusion The commencement of EACCA merger filings marks a pivotal shift in the East African competition landscape. However, the absence of formal jurisdictional ceding by the FCC and the ZFCC means that, for now, parties to cross-border mergers must navigate a complex multi-layered notification regime. Businesses and their advisors should closely monitor developments from all three authorities and take proactive steps to ensure compliance. For tailored advice on your specific transaction, please contact our competition law team.