Morocco Merger Control: When a Takeover Needs Competition Council Approval

Morocco merger control: a legal step that dealmakers can no longer overlook

Royal Air Maroc’s move to acquire sole control of Atlas Servair offers a useful illustration of a rule that many Moroccan executives still discover too late: acquiring a company is not always a matter for the buyer, seller, bankers and shareholders alone. Where the statutory conditions are met, the transaction must also pass through the Moroccan Competition Council.

This is the purpose of the control of economic concentrations in Morocco. Before a merger, takeover or full-function joint venture is completed, the Council examines whether it could significantly harm competition. The review may end with unconditional clearance, approval subject to commitments, or, in the most difficult cases, prohibition.

In practice, some transactions are still signed and even closed without notification because the parties assume that merger control concerns only very large listed groups. That assumption is dangerous. Two regional food distributors, industrial companies or agricultural businesses can cross the relevant thresholds surprisingly quickly once group turnover is consolidated.

This article explains the current Morocco merger notification procedure, the applicable turnover and market-share tests, the review timetable and the consequences of completing a transaction too soon. Readers preparing a deal may also consult our resources on competition law in Morocco, buying a business in Morocco and finding mergers and acquisitions lawyers in Morocco.

1. The legal architecture of merger control in Morocco

1.1 Law No. 104-12 and the transition from an advisory to an effective system

Morocco’s modern merger-control regime is principally governed by Law No. 104-12 on freedom of prices and competition, promulgated by Dahir No. 1-14-116 of 2 Ramadan 1435, corresponding to 30 June 2014. Its provisions concerning concentrations appear in Articles 11 and following.

The earlier Law No. 06-99 already contained competition rules, but the institutional structure was much less effective. The Competition Council essentially performed an advisory role and merger review remained limited in practice. Law No. 104-12 changed the landscape by granting the Council genuine decision-making and enforcement powers.

Article 166 of the Constitution of 2011 establishes the Competition Council as an independent institution responsible for ensuring transparency and fairness in economic relations, particularly by analysing and regulating competition in markets and controlling anticompetitive practices, unfair commercial practices and concentration operations.

The reform therefore has a constitutional foundation. The Council is not a department acting on behalf of one of the parties to the transaction. It is an independent constitutional body whose decisions may have immediate financial and operational consequences.

Law No. 40-21 subsequently amended and supplemented Law No. 104-12. The implementing framework was also updated, notably through Decree No. 2-23-273 of 24 May 2023, which amended the turnover thresholds contained in Decree No. 2-14-652. This point matters because older articles and transaction checklists still reproduce figures that are no longer current.

1.2 The implementing decrees and notification rules

Law No. 104-12 sets out the legal principles: what constitutes a concentration, when notification is required, how the Council reviews a transaction and what sanctions may be imposed. The implementing decree supplies the operational details, including turnover thresholds and elements of the filing process.

The notification form and current practical documentation are available through the official website of the Moroccan Competition Council. The filing is considerably more than a letter informing the authority that a transaction exists. It requires corporate documents, financial information, a reasoned market definition, market shares, details about competitors and customers, and an assessment of the likely competitive effects.

Moroccan merger law draws visibly on European competition law, particularly the concepts used under Council Regulation (EC) No. 139/2004. Yet the systems are not interchangeable. Morocco has its own thresholds, local-effects analysis, procedure and developing decisional practice. Copying an EU filing and changing the names is rarely enough.

1.3 A developing Moroccan decisional practice

The Council has become increasingly active and publishes merger decisions and annual reports. Even so, Moroccan merger-control doctrine is younger than that of the European Commission, which has accumulated decades of decisions, notices and court judgments. Some points are consequently less predictable in Morocco, especially in markets for which reliable public data are scarce.

This makes the published decisions of the Competition Council particularly valuable. They reveal how the authority defines markets, treats overlapping activities and assesses local competitive conditions. Decisions must nevertheless be read on their own facts; a clearance in aviation, retail or agricultural inputs cannot automatically be transposed to another transaction.

2. What qualifies as a concentration?

2.1 Mergers, acquisitions and full-function joint ventures

Article 11 of Law No. 104-12 identifies the events capable of constituting a concentration. Broadly stated, a concentration occurs when previously independent undertakings merge, when one or more persons already controlling an undertaking acquire direct or indirect control over another undertaking, or when undertakings create a joint venture that performs on a lasting basis all the functions of an autonomous economic entity.

Under Article 11, a change of control may result from the acquisition of securities or assets, a contract, or any other means conferring decisive influence over an undertaking or part of an undertaking.

The legal question is therefore not confined to the percentage of shares transferred. A conventional acquisition of 100% of a target plainly creates sole control. A transaction involving 35% of the capital may also do so if the buyer obtains decisive voting rights, the ability to appoint management or strategic vetoes over the budget, business plan, investments or senior executives.

2.2 Control can be legal or factual, sole or joint

Control means the possibility of exercising decisive influence. It may arise from ownership rights, voting rights, contractual arrangements or a combination of factors. A stable minority shareholder can enjoy de facto control where the remaining shares are widely dispersed and attendance at previous general meetings shows that the minority block regularly determines the outcome.

Joint control exists where two or more shareholders must agree on strategic decisions. This commonly appears in shareholders’ agreements requiring both investors to approve the annual budget or major investments. In that situation, neither shareholder can determine strategy alone, but each can block it. A move from joint control to sole control is itself capable of being a new concentration.

This is why company-law due diligence must examine more than the cap table. Lawyers should read the articles of association, investment agreement, veto clauses and governance history. Businesses in northern Morocco can seek advice from an experienced corporate lawyer in Tangier, particularly when minority rights are being renegotiated.

2.3 Transactions that normally fall outside the definition

A purely internal reorganisation generally does not constitute a concentration where the ultimate controlling entity remains unchanged. Moving a subsidiary from one wholly controlled holding company to another within the same group does not combine previously independent economic units.

Likewise, acquiring a non-controlling minority interest is not normally a concentration, although the arrangement may still need to be examined under rules governing anticompetitive agreements or exchanges of sensitive information. Temporary holdings by credit or financial institutions may also receive specific treatment where the statutory conditions are satisfied and the voting rights are not used to determine competitive conduct.

A joint venture that lacks operational autonomy is another delicate case. If it merely performs one function for its parents and depends on them for staff, customers, financing or supplies, it may not be a full-function concentration. But its agreements can still be reviewed under the prohibition of restrictive practices. Labels do not decide the issue; economic reality does.

3. Current Moroccan merger-notification thresholds

3.1 Do not rely on the old MAD 750 million figure

A correction is essential here. Many online summaries still state that notification becomes mandatory when combined turnover exceeds MAD 750 million and that two parties must each exceed MAD 150 million in Morocco. That is not an accurate statement of the current regime.

Article 12 of Law No. 104-12, as amended, must be read with the regulatory thresholds updated by Decree No. 2-23-273. The current screening exercise considers the following figures:

• MAD 1.2 billion in combined worldwide turnover for all undertakings or groups concerned;
• MAD 400 million in combined turnover achieved in Morocco by the undertakings or groups concerned;
• MAD 50 million individually in Morocco for at least two of the undertakings or groups concerned, as the local-nexus requirement associated with the turnover tests; and
• the separate statutory 40% market-share test on a national market, or a substantial part of it, for goods or services of the same kind or substitutable goods or services.

The structure of Article 12 and the amended decree should be applied carefully to the precise transaction, particularly where the worldwide threshold is met but Moroccan sales are limited. The 40% market-share test must never be ignored merely because turnover appears to fall below the financial thresholds. A specialist should verify the current consolidated texts at signing, since thresholds may be modified by regulation.

In plain terms, the obligation is not reserved for Morocco’s equivalent of the CAC 40. Imagine two regional food-distribution groups. Group A records MAD 280 million in Moroccan turnover and Group B records MAD 170 million. Their combined Moroccan turnover is MAD 450 million, and both individually exceed MAD 50 million. Subject to the remaining statutory analysis, their deal may trigger mandatory notification even though neither is a multinational giant.

SME owners should conduct the same screening before negotiating definitive documents. Our legal resources for Moroccan SMEs address related corporate and commercial precautions.

3.2 How turnover is calculated

Article 13 of Law No. 104-12 governs turnover calculation. The analysis is performed at group level, not merely by comparing the turnover appearing in the buyer’s and target’s individual statutory accounts. Turnover of entities controlling a party, controlled by it, under common control or jointly controlled may have to be included according to the statutory attribution rules.

For an acquisition, the seller’s unrelated activities are not automatically counted simply because the seller signs the sale agreement. The relevant target turnover usually concerns the undertaking or assets over which control is acquired. Conversely, the acquirer’s entire economic group may have to be considered.

The reference period is ordinarily the latest completed financial year, using net turnover after taxes directly related to sales and after intra-group transactions have been eliminated. Audited financial statements, management accounts and geographical sales breakdowns should be reconciled. If the group has made acquisitions or disposals since year-end, adjustments may be necessary to reflect the current perimeter.

3.3 Banks, insurers and other regulated sectors

Ordinary sales turnover is not always meaningful for financial institutions. The law and implementing rules therefore provide adapted calculations for banks and other financial institutions, based on relevant banking income components, and for insurance companies, where issued or gross written premiums and related statutory measures are used.

Sector regulation does not displace merger control. A banking transaction may require intervention from Bank Al-Maghrib and the Competition Council; an insurance transaction can involve the Insurance and Social Welfare Supervisory Authority, known as ACAPS; and a capital-markets transaction may raise issues before the Moroccan Capital Market Authority. The approvals are distinct and should be included separately in the transaction timetable.

3.4 A short international comparison

The comparison is intentionally general. Threshold systems are not directly comparable, and a transaction may require parallel filings in Morocco, the European Union and several national jurisdictions.

4. The Moroccan merger-notification procedure, step by step

4.1 Notification must take place before completion

Article 14 of Law No. 104-12 establishes prior notification. The parties may file once they can demonstrate a sufficiently advanced project, for example after signing an agreement or announcing a public offer, but the transaction must not be implemented before clearance.

In a merger, the merging parties ordinarily notify jointly. For the acquisition of sole control, the acquirer bears the filing obligation. Where control is acquired jointly or a full-function joint venture is created, the parties acquiring joint control file together.

The sale agreement should therefore contain a condition precedent requiring Competition Council clearance. Signing and closing are different moments. The parties may sign a binding agreement, provided that control does not transfer and integration does not begin until approval has been obtained.

4.2 What the notification file contains

The official filing requires detailed information about the parties, their groups and the transaction. A robust file will normally include:

• the transaction agreements, corporate charts and documents establishing control;
• financial statements and turnover calculations, including the Moroccan geographical allocation;
• a description of each relevant product or service market and its geographical scope;
• market-share estimates, calculation methods and supporting sources;
• information on principal competitors, suppliers and customers;
• an analysis of horizontal, vertical and conglomerate relationships;
• internal documents explaining the commercial rationale of the deal; and
• any efficiencies or commitments relied upon by the notifying parties.

The Council can declare a file incomplete and request additional information. The statutory review clock does not safely begin until the notification is complete. A hurried filing may therefore save three days at the start and lose several months later.

For a conventional transaction, counsel should begin preparing the filing four to six weeks before the intended submission date. More time is needed where market data are poor, the parties overlap significantly or foreign-language documents require reliable translation.

4.3 Phase I: the initial 60-day examination

The initial review period is governed principally by Article 15 of Law No. 104-12, not Article 17. The Council has 60 days from receipt of a complete notification to conduct its first-stage examination. The statute and procedural rules contain mechanisms capable of extending or suspending the effective timetable, notably where commitments are offered or necessary information is missing.

At the end of Phase I, the Council may find that the transaction does not fall within the merger-control regime, clear it because it does not raise competitive concerns, clear it subject to commitments, or decide that an in-depth examination is required.

Deal documents should not translate “60 days” into a guaranteed closing date exactly two months after filing. Completeness discussions, public holidays, information requests and commitment negotiations all affect the real calendar. A cautious long-stop date is essential.

4.4 Phase II: an additional 90-day in-depth review

Where serious competition issues remain, the Council may open an in-depth examination under Articles 17 and 18 of Law No. 104-12. The Phase II period is 90 days, subject again to the statutory rules on suspension, extensions and commitments.

The Council may consult competitors, customers, suppliers, regulators and public bodies. It can test the parties’ market-share calculations, examine barriers to entry and determine whether the merged firm could raise prices, reduce quality, foreclose rivals or weaken innovation.

A straightforward filing may take three to four months from preparatory work to clearance. A complex case involving Phase II can require six to nine months, sometimes longer where information is disputed or remedies must be tested.

4.5 Possible outcomes and commitments

The Council can grant unconditional clearance, approve the transaction subject to obligations, or prohibit it. Commitments generally fall into two categories.

Structural remedies change the structure of the transaction or market. They may require the divestiture of a subsidiary, production line, brand, customer portfolio or other viable business. Competition authorities often favour these remedies because they can restore an independent competitive force without requiring permanent supervision.

Behavioural remedies regulate future conduct. Examples include non-discriminatory access to infrastructure, continuity of supply, restrictions on tying products, or safeguards against the exchange of sensitive information. They may be appropriate, particularly in vertical cases, but monitoring can be demanding.

A formal prohibition is not the only bad outcome. A remedy package agreed too late can reduce the economic value of the acquisition. Competition analysis should therefore begin during deal structuring, not after the purchase price has become irreversible.

5. How the Competition Council analyses a takeover

5.1 The substantive competition test

The Council examines whether the transaction would harm competition, notably by creating or strengthening a dominant position. The amended Moroccan framework increasingly reflects the broader inquiry familiar in modern merger control: whether the operation may significantly impede effective competition.

Dominance is not unlawful by itself. The question is whether the merger changes market structure in a manner that gives the merged entity sufficient power to act without meaningful constraint from competitors, customers or new entrants.

5.2 Defining the relevant market

The relevant market has a product dimension and a geographical dimension. The product market groups goods or services that customers regard as reasonably interchangeable because of their characteristics, price and intended use. The geographical market covers the area in which competitive conditions are sufficiently homogeneous.

This exercise can determine the result. A company may hold 12% of a national market but 55% of a narrower regional market. Airport catering at Mohammed V International Airport, for example, may raise questions different from those arising in a hypothetical nationwide market for all food preparation services. Regulatory access, security clearances and airport infrastructure can severely limit substitution.

Good market definition depends on evidence: tender data, customer switching patterns, transport costs, internal strategy documents, price comparisons and barriers to entry. Unsupported statements that “the market is very competitive” carry little weight.

5.3 Horizontal, vertical and conglomerate effects

Horizontal effects arise when the parties are actual or potential competitors. The Council assesses market shares, concentration levels, closeness of competition, customers’ bargaining power and the likelihood of entry.

Vertical effects arise where one party supplies an input or distribution channel used by the other. The principal concern is foreclosure: could the merged group deny rivals access, worsen supply conditions or reserve an essential outlet for itself?

Conglomerate effects concern complementary or neighbouring products. They are often less problematic, but a strong portfolio can sometimes be used to bundle products or leverage market power.

The parties may rely on verifiable efficiencies, such as lower production costs, improved logistics or new investment. Those benefits should be transaction-specific and sufficiently likely to reach customers. A general promise that the merger will create “synergies” is not an economic demonstration.

6. Failure to notify and gun-jumping sanctions

6.1 The fine for failure to notify

The relevant sanctions appear principally in Articles 19 and 20 of Law No. 104-12. Contrary to a frequent citation error, Article 23 should not be presented as the sole statutory basis for the 5% failure-to-notify penalty.

For an undertaking, the financial penalty for failing to notify can reach 5% of the pre-tax turnover achieved in Morocco during the latest completed financial year, subject to the wording applicable to the undertaking or group concerned. Natural persons responsible for notification may face a fine of up to MAD 5 million.

The Council may also order the parties to notify the transaction, restore the previous situation or modify the operation. A separation or disposal order can be commercially more damaging than the fine itself.

6.2 Gun-jumping: closing or integrating too early

Gun-jumping means implementing all or part of the transaction before clearance. Obvious examples include transferring shares, paying consideration in return for control, replacing management or combining businesses. More subtle forms include directing the target’s commercial strategy, approving ordinary-course contracts beyond legitimate purchaser protection, coordinating prices, allocating customers or exchanging competitively sensitive data without safeguards.

I once dealt with a situation in which a director signed what he regarded as the “final formality” late on a Friday evening. By Monday morning, it was clear that the document had transferred control before merger clearance. The weekend did not cure the breach. The parties then had to freeze integration, reconstruct communications and manage an avoidable regulatory exposure. The client remains unnamed, of course, but the lesson is universal: a closing checklist must contain a genuine competition-law stop sign.

There is no general system of automatic retrospective validation. A narrowly framed derogation from the suspensive effect may be requested in exceptional circumstances, for example where immediate action is necessary to preserve a failing target. It requires a reasoned application and should never be treated as a convenient substitute for timely filing.

6.3 Clean teams and interim operating covenants

Between signing and clearance, the target must remain an independent competitor. The buyer may protect the value of the business through proportionate interim covenants, but it must not run day-to-day operations.

Where due diligence or integration planning requires sensitive information, the parties can establish a clean team consisting of external advisers or employees without commercial decision-making roles. Data can be aggregated, anonymised or delayed. This is particularly necessary where buyer and target compete for the same customers.

7. Royal Air Maroc and Atlas Servair: what the case illustrates

7.1 A move from existing participation to sole control

The Royal Air Maroc and Atlas Servair transaction is useful because it shows that merger control does not concern only the first purchase of shares. A change from joint or shared influence to sole control can constitute a fresh concentration even where the acquirer was already a shareholder.

Atlas Servair operates in aviation catering and related airport services. Royal Air Maroc’s acquisition of full control therefore required analysis of the links between the airline’s activities and services supplied within airport environments.

7.2 Competition questions in airport catering

Airport markets can be naturally concentrated. Operators require secure premises, regulatory permissions, logistical capacity and the ability to deliver within strict aviation schedules. Entry at Casablanca Mohammed V Airport may not be equivalent to opening an ordinary catering business elsewhere in Casablanca.

The Council could therefore examine product and geographic market definition, access to airport infrastructure, the presence of competing catering providers and the possibility of discriminatory treatment. Vertical questions may arise where a major airline controls a supplier serving airlines that compete with it.

One should not invent commitments or infer concerns that do not appear in the published decision. The authoritative source is the decision released by the Competition Council, including its exact operative provisions and any annexed obligations. The prudent lesson is narrower: strategic or state-linked status does not remove an acquisition from merger review.

7.3 What businesses should learn from the decision

First, changes in the quality of control matter as much as changes in the percentage held. Second, regulated transport and infrastructure markets demand careful market definition. Third, early engagement can help identify whether access, supply or non-discrimination issues are likely to concern the Council.

8. Practical advice for preparing a Moroccan merger filing

8.1 Use pre-notification contacts intelligently

Experienced counsel often contact the Competition Council’s services before formal filing. This pre-notification stage is not a way to obtain a secret clearance. It allows the parties to introduce the transaction, test whether the proposed market definitions are intelligible, identify missing data and anticipate likely questions.

For a difficult transaction, a well-managed pre-notification process can save time after filing. Confidentiality, document status and the sequencing of information should nevertheless be handled carefully.

8.2 Build the right legal and economic team

Legal representation is not formally mandatory merely to submit a notification. In practice, specialist assistance is strongly advisable. The team should normally include a Moroccan competition lawyer, the M&A lawyers drafting the conditions precedent and, where market definition or effects are disputed, an industrial-organisation economist.

Depending on location and sector, parties may consult business lawyers in Casablanca, competition lawyers in Rabat or an experienced commercial lawyer in Marrakech. Local corporate counsel, tax advisers and sector specialists should work from a single regulatory timetable.

8.3 Costs and realistic timing

There is generally no official filing fee comparable to the substantial administrative fees imposed in some foreign jurisdictions. The principal costs are lawyers’ fees, economic advice, translations and data collection.

There is no statutory tariff for professional fees. As an indicative market range rather than a guaranteed quotation, a standard Moroccan filing may generate legal and economic fees of approximately MAD 200,000 to MAD 500,000. A contested Phase II case involving economic modelling, extensive data and remedy negotiations can exceed MAD 1 million.

The real timetable starts before submission. Allow four to six weeks for a straightforward filing, followed by the formal review period and sufficient time for closing mechanics. A complex acquisition should include a long-stop date capable of accommodating Phase II and remedy implementation.

8.4 Four mistakes that repeatedly cause trouble

1. Using obsolete thresholds. The former MAD 750 million figure still circulates online. Screening must use the current consolidated legislation.
2. Counting only the contracting companies. Turnover may have to be calculated across the relevant groups.
3. Treating signing as permission to integrate. Control and commercial coordination must wait for clearance.
4. Underestimating market data. Unsupported market shares invite information requests and delay completeness.

I understand the pressure of a deal: the seller is impatient, the lenders want to close before quarter-end, and management believes every regulatory question can be resolved later. But experience teaches a less glamorous truth. One extra month spent preparing the notification can prevent six months of injunctions, remedial negotiations and potential fines.

Conclusion: merger clearance belongs on the first deal checklist

Moroccan merger control is no longer a theoretical chapter in a competition-law textbook. Law No. 104-12 gives the Competition Council the authority to review takeovers, impose commitments, penalise premature implementation and, where necessary, require structural corrective measures.

The correct sequence is straightforward: identify whether control changes, calculate turnover at group level, test the market-share threshold, prepare the filing, preserve the target’s independence and close only after authorisation. The legal analysis is less straightforward, especially for minority investments, joint ventures and transactions spanning several countries.

Executives contemplating a takeover of a company in Morocco should consult competition counsel while the deal is still being structured. At that stage, notification conditions, risk allocation and the long-stop date can be negotiated sensibly. After an unlawful closing, the available solutions become fewer, slower and considerably more expensive.