Jurisprudential Value of Tanga Fresh v. Fcc in the Law of Mergers & Acquisitions in Tanzania

Abstract

The Fair Competition Act of Tanzania regulates and controls, among others, mergers and acquisitions of business entities. This Act, together with its regulations, establishes a framework which requires proposed mergers and acquisitions amounting to eight hundreds millions Tanzanian shillings or more to be notified to the Fair Competition Commission before being consummated. The notification requirement enables FCC to ascertain the impact of the proposed transaction on effective competition in the market. Any transaction whose effect is to lessen effective competition to the detriment of consumers is likely to be blocked.

FCC has dealt with a number of mergers and acquisitions cases. One of the cases is that of Tanga Fresh v. FCC, in which Tanga Fresh merged with its two competitors in Tanga region without first being cleared by the FCC. This is the first merger case to be determined by the Tribunal. The Tribunal delivered a well-reasoned opinion which set important precedents that are very essential in understanding the law on mergers and acquisitions in Tanzania. This article attempts to discuss those precedents in detail. Some of the aspects discussed in this article include definition of the term merger, elaboration on the failing firm doctrine, effects of admissions in inquisitorial proceedings, rules of natural justice, breach of standstill obligation or gun jumping and factors which a competition authority should take into account in mergers and acquisitions analysis.