Sequencing Regulatory Approvals in Tanzania M&A Deals: FCC Clearance or Sector Regulator First?

In Tanzanian M&A transactions involving regulated sectors such as mining, banking, insurance, telecommunications, or energy, obtaining the necessary regulatory approvals can be just as important as negotiating the transaction itself. A common question for investors and deal teams is whether they should obtain approval from the relevant sector regulator first or seek merger clearance from the Fair Competition Commission (FCC).

The answer is that there is no universal rule. The correct approach depends on the sector-specific legislation and the nature of the approval required. However, as a practical matter, parties should generally begin the FCC process as early as possible while engaging with the sector regulator in parallel.

Why Multiple Approvals May Be Required

A transaction may require FCC merger clearance where it involves a change of control and meets the applicable merger notification thresholds under the Fair Competition Act.

At the same time, sector-specific approvals may also be triggered, for example:

• Mining: Mining Commission consent for transfers of mining licences or special mining licences.

• Banking: Bank of Tanzania approval for acquisitions of significant shareholdings or changes of control.

• Insurance: TIRA approval for changes of control and portfolio transfers.

• Telecommunications: TCRA approval for changes of control in licensed operators.

• Energy and Petroleum: EWURA or TPDC approvals, depending on the transaction structure.

As these regulators apply different legal tests and operate on different timelines, approval planning should begin early in the transaction process.

Why FCC Clearance Should Usually Be Filed Early

In most transactions, FCC merger clearance is the approval that can have the greatest impact on the overall timetable.

Three factors make early filing advisable:

• A notifiable merger cannot be implemented before FCC clearance is obtained.

• The FCC review process can take longer than sector-specific approvals.

• Failure to notify a notifiable merger can result in significant penalties and transaction risk.

In addition, some sector regulators may be reluctant to issue their final approval before the parties have obtained FCC clearance.

Why You Should Not Ignore the Sector Regulator

Although FCC clearance is often a critical approval, waiting until it is obtained before approaching the sector regulator can create unnecessary delays.

Sector regulators frequently examine matters that fall outside the FCC's mandate, including:

• Technical and financial capability;

• Licensing compliance;

• Local content requirements;

• Outstanding fees or royalties; and

• Fit-and-proper assessments.

These issues can take time to address and may ultimately determine whether a transaction can proceed.

Best Practice: Run Both Processes in Parallel

For most regulated M&A transactions, the practical solution is to pursue both approval tracks simultaneously.

Deal teams should:

1.    Identify all required approvals during legal due diligence.

2.    File the FCC merger notification as early as possible.

3.    Engage the relevant sector regulator at the same time.

4.    Include all key approvals as conditions precedent in transaction documents.

5.    Resolve outstanding compliance issues before submitting applications.

6.    Maintain open communication with regulators throughout the process.

A parallel approach helps avoid unnecessary delays and reduces the likelihood of regulatory surprises late in the transaction timetable.

Mining Transactions: A Common Example

Consider the acquisition of a company holding a mining licence where the transaction also meets the FCC notification thresholds. In such a case, parties should generally:

• Submit the FCC merger notification promptly;

• Engage the Mining Commission concurrently on the licence-transfer consent process;

• Treat both approvals as conditions precedent to completion; and

• Avoid implementing any change of control until all required approvals have been obtained.

Neither approval replaces the other. FCC clearance addresses competition issues, while the Mining Commission focuses on matters such as technical capability, financial capacity, regulatory compliance, and local content obligations.

Key Takeaway

There is no strict rule that FCC merger clearance or sector regulator approval must come first. However, in most Tanzanian M&A transactions, the safest and most efficient approach is to file with the FCC early while engaging the relevant sector regulator in parallel. Proper sequencing, early regulatory engagement, and realistic transaction planning can significantly reduce execution risk and help keep deals on track.