The Egyptian merger control regime saw considerable amendments in 2024. Most notably the country introduced a mandatory pre-closing notification regime with suspensory effect. This has led to a stark increase in merger filings received by the Egyptian Competition Authority (ECA). Notably, the ECA imposed remedies in one case during the first 6 months of the new regime being applied. On 13 October 2024, the ECA cleared, subject to certain commitments, the acquisition of a stake in Social Impact Capital Ltd. (SIC), ranging from 31.7% to 48.8% by Saudi Egyptian Investment Company (SEIC) through one of its wholly owned subsidiaries, Afak Al Alam Investment Company. Through this acquisition, SIEC also became a controlling stakeholder in Cairo for Investment and Real Estate Development CIRA Education (CIRA Education)—a subsidiary of SIC—and thereby controlling interest in several education businesses in Egypt, including Badr University.
Among the several undertakings SEIC acquired control in through the transaction the Badr University was of specific interest to the ECA in their review. Still, in their decision the ECA provided little explanation on why the acquisition of control over Badr University was particular concern. They only stated generally that the transaction proposed competitive concerns and listed the remedies imposed.
On 12 September 2024, the ECA deemed the filing complete. Their showed that while the parties were largely engaged in unrelated sectors, their activities overlapped horizontally in the healthcare sector. SEIC and their group are active in the healthcare sector through their stake in Cleopatra Hospital, whereas CIRA Education is active in the healthcare sector through their interest in the Egyptian for Healthcare Services Company. The ECA concluded that this overlap raised competition concerns, particularly regarding the exchange of sensitive commercial information, which would ultimately restrict the competition in the Egyptian market. To address and alleviate the ECA’s concerns, the parties proposed a package of behavioural remedies. These included restrictions regarding board representation as well as exchange of information. Specifically:
- SEIC and their group shall not appoint any members to the board of directors of Cleopatra Hospital or any of its employees to the board of trustees of Badr University.
- Representatives of SEIC and their group appointed to CIRA Education’s board and Badr University’s board of trustees must not hold any position Cleopatra Hospital.
- Representatives from Egyptian for Healthcare Services Company and SEIC and their group appointed to the CIRA Education’s board and Badr University’s board of trustees must sign confidentiality and non-disclosure agreements to prevent the exchange of sensitive commercial information, particularly regarding the operation of the Egyptians Healthcare Services.
- Decisions, and discussion related to Egyptian for Healthcare Services Company may only be addressed in meetings of CIRA Education’s board and Badr University’s board of trustees at which representatives from SEIC and their group are not present.
- CIRA Education and Badr University may not exchange commercially sensitive information related to Cleopatra Hospital and Egyptian for Healthcare Services Company with SEIC and their group.
- The board members of Egyptian for Healthcare Services Company may not exchange any sensitive information relating to the operation of Egyptian for Healthcare Services Company with SEIC and their group.
- SEIC and any other entity of their group must commit to informing the ECA of any direct or indirect acquisition of material influence in Egyptian for Healthcare Services Company they consider.
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