First sanction for gun jumping in Morocco

In a decision dated 28 April 2022, the Moroccan Competition Council (CC) imposed its first fine for failure to notify a merger in Morocco ("gun jumping"). By this decision, the CC takes the opportunity to strongly recall that : 

• international groups (and not just Moroccan companies), particularly if they have a presence in Morocco, are subject to merger control in Morocco;
• notification thresholds are drafted in such a way that they have the effect of catching many transactions, whether they have a Moroccan or international dimension;
• although the CC sanctioned the acquirer in this case for failure to notify, in addition to having closed the transaction prematurely before the CC’s approval, filing is suspensory and any anticipated closing of a transaction, even if previously notified, could also be sanctioned. It is therefore essential to schedule the transaction by taking into account the review period necessary to obtaining the CC’s clearance.

In this case, after noting that two related transactions had been implemented without being notified to it, the CC took up the matter ex officio in December 2021. More specifically, the case concerned:

(i) the acquisition of sole control of Financière Dry Mix Solutions, a French company active in the production and marketing of mortar products, by Sika, a Swiss company and world leader in the manufacture and marketing of construction chemicals; and 

(ii) the acquisition of 45% of the capital of Sodap Maroc by Sika Maroc (the subsidiaries of Financières Dry Mix Solutions and Sika, respectively).

As a reminder, as merger control thresholds in Morocco are alternative and particularly low ((i) combined worldwide turnover of the parties > DHS 750 million, or (ii) turnover in Morocco of at least two of the parties > DHS 250 million, or (iii) combined market share in Morocco > 40%), many international transactions are automatically subject to merger control, even if they have no impact on Moroccan markets at first sight. 

According to publicly available data, the companies concerned met the worldwide turnover threshold. However, the press release does not specify whether any or all of the other thresholds were also met. 

In this case, these transactions were carried out without prior notification to the CC and, a fortiori, without any approval. Nevertheless, as in many established jurisdictions, Morocco has set up a mandatory and suspensory notification procedure, which requires to wait for the formal clearance or the expiry of the legal review period (maximum 60 calendar days after receipt of a complete filing for a Phase I clearance without commitments). Therefore, in the future, the CC could also impose sanctions for merely implementing a transaction before receiving clearance, even if the transaction was previously filed to it. 

Although the proportion of the fine imposed (DHS 11,670,215 or approximately EUR 1 million) in relation to the buyer's turnover is not specified, it appears to be relatively moderate. This might be related to the fact that this is the first decision imposing such a fine for this type of infringement in Morocco. However, it cannot be excluded that the CC might decide in the future to impose more severe fines, within the legal limit of 5% of the buyer's turnover in Morocco.