In today’s competitive business environment, companies are constantly seeking strategic ways to grow, stay relevant, or reduce competition. One of the most common approaches is through mergers. For legal and compliance professionals, understanding the regulatory landscape around mergers in Nigeria is not only important—it’s essential.
This article provides a simplified, practical guide to mergers in Nigeria, tailored for compliance experts, lawyers, and business stakeholders who want a clear grasp of how the process works from start to finish.
What Is a Merger?
A merger is when two or more companies combine into a single entity, often to achieve greater efficiency, access new markets, or reduce operational costs. Imagine two separate businesses deciding to join forces and operate under one name—pooling resources, staff, and customer base to become stronger together.
Why Do Companies Merge?
There are several reasons why businesses might consider merging, including:
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Expansion into new markets or industries
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Elimination of competition
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Increased operational efficiency
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Access to new products, technology, or expertise
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Cost reduction through shared resources
Types of Mergers in Nigeria
Under the Federal Competition and Consumer Protection Act (FCCPA), 2018, mergers in Nigeria are classified into three categories, based primarily on the turnover or asset value of the merging companies:
1. Small Merger
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Combined turnover or assets is ₦1 billion or less
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Notification to the FCCPC is optional
2. Intermediate Merger
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Combined turnover or assets is between ₦1 billion and ₦5 billion
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Mandatory notification to the Federal Competition and Consumer Protection Commission (FCCPC)
3. Large Merger
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Combined turnover or assets is above ₦5 billion
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Requires compulsory notification and approval
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The Securities and Exchange Commission (SEC) is also involved, especially for public companies
Regulatory Authorities Involved
The primary regulator for mergers in Nigeria is the FCCPC, which ensures that mergers do not harm consumer welfare or reduce market competition.
Other regulators may include:
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Securities and Exchange Commission (SEC) – for public companies
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Corporate Affairs Commission (CAC) – for corporate restructuring and filings
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Central Bank of Nigeria (CBN) – for mergers involving banks
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National Insurance Commission (NAICOM) – for insurance companies
See Also: Key Regulatory Compliance Requirements for Nigerian Businesses in 2025
Step-by-Step Process of a Merger in Nigeria
Here’s a simplified breakdown of the typical steps involved in executing a legally compliant merger:
Step 1: Board Approval
Both companies must obtain approval from their respective boards of directors.
Step 2: Due Diligence
A full assessment of assets, liabilities, and legal obligations is conducted.
Step 3: Merger Agreement
A detailed agreement outlining the structure, terms, and method of merger is prepared and signed.
Step 4: Notification and Regulatory Filing
Relevant forms and documents are submitted to the FCCPC—and SEC where applicable. This stage includes the payment of prescribed filing fees.
Step 5: Stakeholder Approval
Shareholders, creditors, and sometimes the court (especially in a scheme of arrangement) must approve the merger.
Step 6: Regulatory Decision
The FCCPC reviews the proposed merger and may approve it, approve it with conditions, or reject it.
Step 7: CAC Filing and Re-registration
Post-approval, the merged entity must register the changes with the CAC and obtain a new certificate if necessary.
Step 8: Post-Merger Compliance
After the merger, the new entity must notify relevant regulators, update tax records, and ensure continuity of obligations and licenses.
Key Compliance Requirements
To ensure a smooth process and avoid penalties, here are some core compliance checkpoints:
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Accurate and complete disclosures during notification
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Compliance with sector-specific rules
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Obtaining necessary approvals before implementation
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Keeping proper documentation for audits or regulatory reviews
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Adherence to post-merger filing and reporting obligations
Failure to comply may result in penalties, including fines of up to 10% of annual turnover, reversal of the merger, or director liability.
Notable Mergers in Nigeria
Some notable mergers in Nigeria in recent years include:
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Access Bank and Diamond Bank – a landmark consolidation in the banking sector
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Flour Mills Nigeria and Honeywell Flour Mills – expansion in the food manufacturing industry
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BUA Cement and Cement Company of Northern Nigeria (CCNN) – a major play in the cement industry
These high-profile transactions highlight the strategic value and economic significance of mergers in Nigeria’s evolving market.
Conclusion
Understanding the legal and regulatory framework around mergers in Nigeria is critical for compliance professionals and corporate lawyers alike. Whether you are advising clients, representing investors, or managing internal compliance, having a clear roadmap ensures that your merger transactions are smooth, lawful, and successful.
As Nigeria continues to grow its business and investment climate, the role of compliance experts in facilitating mergers has never been more important.
Need Help With Merger Compliance?
At Kwik Attorneys and Kwik Compliance Hub Ltd, we help businesses navigate the complexities of regulatory filings, merger notifications, and post-transaction compliance. Get in touch to schedule a consultation today.
