Amended competition law may delay Access, Diamond banks’ merger

Although Access Bank and Diamond Bank Plc have obtained approval in principle from the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) on proposed merger plans, there are concerns that the union may be subjected to the provisions of the new Federal Competition and Consumer Protection Act.

Indeed, the Act repeals the provisions (sections 118-128) of the Investment and Securities Act relating to mergers (effectively stripping the Securities and Exchange Commission of its power to approve mergers) and places the responsibility of approving merger transactions on the Competition Commission.

Already, the banks are awaiting the final approval which would be granted after convening shareholders’ meeting.

Speaking on the provisions of the Act, the Director-General of the Consumer Protection Council (CPC), Babatunde Irukera explained that though the new law is not explicit about the particular merger, any uncompleted merger must comply with the new law.

He said: “Anything that has happened before that law currently stands, but anything that is ongoing or currently happening, requires that all the parties in the transactions comply with any existing valid law. To the extent there is a law, any transaction must respect that law.

“It means that the uncompleted merger must comply with the new law. However, while that is the position of the law, it is not a factual position in this specific case. I am not talking about the applicability to this particular merger or case”, he added.

Access bank Plc, when contacted said they would respond to the issue at the close of business tomorrow (today). In the same vein, Diamond bank said that the legal team has promised to revert with a reaction tomorrow (today).

Apparently the banks intend to go review the new law to ascertain how it relates to the merger process of the entities.