Merger control in Morocco is now a boardroom issue
A Moroccan acquisition can be commercially sound, properly financed and carefully documented, yet still be unable to close because one regulatory question was raised too late: does the transaction require prior approval from the Moroccan Competition Council?
The recent attention surrounding transactions involving the investment fund Lone Star illustrates the growing visibility of the Conseil de la concurrence in major capital transactions. These cases should not be treated as isolated business news. They send a broader signal to Moroccan companies, foreign investors, banks and private-equity funds: merger control has become a genuine closing issue in Morocco.
The legal foundation is Law No. 104-12 on freedom of prices and competition, promulgated by Dahir No. 1-14-116, as subsequently amended, notably by Law No. 40-21. Its institutional counterpart is Law No. 20-13 relating to the Competition Council. The detailed turnover thresholds are set by the implementing decree, including the amendments introduced by Decree No. 2-23-273 of 6 May 2023.
One clarification is essential from the outset. Older articles, legal memoranda and transaction templates still refer to thresholds of MAD 750 million or to other figures taken from the original version of Decree No. 2-14-652. Those figures should not be used without checking the current consolidated legislation. The notification thresholds were revised in 2023.
This article explains what qualifies as a concentration, how the current thresholds operate, who must file, how long the Moroccan Competition Council procedure may take, and what happens if the parties close without clearance. It is intended not only for M&A lawyers, but also for founders, financial directors and managers of Moroccan SMEs. A competition-law issue is easier and cheaper to address at the letter-of-intent stage than three days before closing.
Businesses seeking preliminary assistance may consult lawyers specialising in Moroccan competition law before signing binding transaction documents.
What is a concentration under Moroccan law?
Mergers, acquisitions and changes of control
Article 11 of Law No. 104-12 identifies the transactions capable of constituting a concentration. Broadly speaking, a concentration arises where previously independent undertakings merge, where one or more persons already controlling an undertaking acquire control of another undertaking, or where undertakings acquire direct or indirect control over all or part of another business.
Under Article 11 of Law No. 104-12, a concentration may result from the merger of previously independent undertakings, the acquisition of control over an undertaking or part of an undertaking, or the creation of a full-function joint undertaking performing on a lasting basis all the functions of an autonomous economic entity.
The legal form is not decisive. A statutory merger, a purchase of 100% of a company's shares and the acquisition of 51% of its voting rights are obvious examples. But an acquisition of assets, a long-term management agreement, minority veto rights or a contractual arrangement may also confer control.
In other words, Moroccan merger control does not ask only, “Was there a merger?” It asks, “Did someone obtain the ability to exercise decisive influence over an economic activity?”
A colleague once described a file involving the sale of 51% of a Moroccan subsidiary. The manager viewed it as an ordinary transfer of shares between investors and was genuinely surprised to learn that it could be a notifiable concentration. The parties had already agreed on a closing date, prepared the share-transfer forms and arranged payment. The competition analysis came last. It should have come first.
Exclusive control and joint control
Control may be exclusive or joint. Exclusive control normally exists where one buyer can determine the target's strategic conduct. Majority voting rights are strong evidence, but they are not indispensable. A minority shareholder may enjoy exclusive control if the remaining shareholding is highly dispersed or if contractual rights give that shareholder decisive influence.
Joint control exists where two or more shareholders must agree on strategic matters. Typical joint-control rights concern the budget, business plan, appointment of senior management or major investments. Not every minority-protection clause creates joint control. Vetoes designed solely to protect the financial value of an investment—for example, a veto against changing the articles of association—may be ordinary protective rights. The drafting and economic context must nevertheless be reviewed carefully.
When is a joint venture a concentration?
A joint venture falls within Article 11 where it performs, on a lasting basis, all the functions of an autonomous economic entity. Practitioners often call this a full-function joint venture.
The vehicle should normally have its own management, staff or operational resources, access to financing, and a durable presence in the relevant market. A joint venture that merely supplies its parent companies, has no genuine commercial autonomy and serves primarily as a coordination mechanism may not qualify as a concentration. It can instead be examined under the rules prohibiting anticompetitive agreements, particularly Article 6 of Law No. 104-12.
Transactions that are not concentrations
A purely internal restructuring does not normally constitute a concentration if ultimate control remains unchanged. Moving shares from one wholly controlled group subsidiary to another is generally outside merger control, even though corporate, tax and foreign-exchange formalities may still apply.
Article 13 of Law No. 104-12 also addresses limited situations in which temporary holdings by credit institutions, financial institutions or similar entities are not treated as concentrations. This exception is subject to conditions. The securities must generally have been acquired with a view to resale, voting rights cannot be used to determine the competitive conduct of the undertaking, and the disposal must take place within the legally permitted period unless an extension is granted.
Attention, however: calling an acquisition “temporary” in an investment committee memorandum does not make Article 13 applicable. The actual holding period, purpose and exercise of voting rights matter.
Current Moroccan merger notification thresholds
Article 12 and the thresholds revised in 2023
The notification analysis is governed by Article 12 of Law No. 104-12, read together with Decree No. 2-14-652 as amended by Decree No. 2-23-273 of 6 May 2023. The current system includes turnover-based tests and a market-share test.
A concentration is subject to Moroccan review where one of the statutory threshold routes is met. In simplified terms, the current principal tests are:
- Worldwide turnover route: the combined worldwide turnover, excluding tax, of all undertakings or groups concerned exceeds MAD 1.2 billion, and at least one undertaking concerned achieves turnover exceeding MAD 50 million in Morocco.
- Moroccan turnover route: the combined turnover, excluding tax, achieved in Morocco by all undertakings or groups concerned exceeds MAD 400 million, and at least two undertakings concerned each achieve more than MAD 50 million in Morocco.
- Market-share route: the undertakings concerned, or some of them, account for more than 40% of sales, purchases or other transactions on a national market for substitutable goods or services, or on a substantial part of that market.
These tests must be applied to the exact legal and economic structure of the transaction. The 40% test is especially easy to overlook. A deal may therefore be notifiable even when its turnover appears modest, provided the parties have a sufficiently high position in a narrow Moroccan market.
The figures sometimes quoted as MAD 750 million worldwide and MAD 150 million for each of two parties do not accurately describe the current regime. They should not be inserted into a shareholders' agreement or legal opinion without reviewing the consolidated decree in force on the signing date.
How turnover is calculated
The relevant turnover is usually that of the last completed financial year, calculated exclusive of tax. It is not limited to the turnover appearing in the buyer's individual statutory accounts. The analysis extends to the relevant economic group: entities controlling the party, entities controlled by it, and other entities under common control may need to be included.
Intragroup sales are generally excluded to avoid double counting. For banks, insurance companies and certain financial institutions, ordinary sales figures are not always meaningful, so the legislation and notification rules use sector-specific indicators.
The calculation becomes more delicate in asset deals. If a buyer acquires only one business division, the seller's entire group turnover is not automatically attributed to the transferred business. The turnover associated with the acquired assets or activity must be isolated according to the applicable rules.
A spreadsheet is useful, but it is not enough. The legal team must first determine who the “undertakings concerned” are. A wrong answer at that stage can invalidate the whole threshold calculation.
Foreign groups and cross-border acquisitions
Moroccan merger control can apply even where the sale agreement is governed by foreign law, the buyer is incorporated abroad and the transaction closes outside Morocco. What matters is the operation's connection with the Moroccan market and satisfaction of the statutory thresholds.
For example, a foreign private-equity fund acquiring an international industrial group may trigger a Moroccan filing because the target sells products through a Moroccan subsidiary or directly to Moroccan customers. The acquirer's portfolio companies must also be reviewed when calculating group turnover and identifying horizontal or vertical links.
Concretely, a “foreign-to-foreign” deal is not automatically outside Moroccan jurisdiction. The notification may have to be coordinated with filings before the European Commission, COMESA authorities or national regulators in other jurisdictions.
Screen the transaction at the LOI stage
The safest practice is to carry out a merger-control screening when the letter of intent is negotiated. The analysis should record the structure of control, group turnover, Moroccan turnover, market shares, relevant markets and any sector-specific approval.
This early memorandum need not be lengthy. It must, however, be defensible. A one-line statement that “the thresholds do not appear to be met” is poor protection if the Competition Council later asks how Moroccan sales or portfolio companies were calculated.
Prior notification to the Moroccan Competition Council
Who files the notification?
The prior-notification requirement is found in Article 14 of Law No. 104-12. In an acquisition of exclusive control, the filing is generally made by the person or undertaking acquiring control. In a merger or an acquisition of joint control, the parties normally notify jointly.
Article 14 establishes the principle of prior notification and prevents the parties from implementing a notifiable concentration before clearance, subject to the limited exceptions provided by law.
A filing can be made once the parties are able to present a sufficiently definite project. A signed share purchase agreement is the clearest basis, but a binding agreement, public offer or other document demonstrating a firm intention may be sufficient depending on the transaction.
What the notification file contains
A complete file is far more than a copy of the SPA. The Competition Council needs enough information to understand the parties, the change of control and the effect on Moroccan markets. Depending on the case, the filing will include:
- the notification form and powers authorising counsel or representatives to act;
- corporate information, group charts, articles of association and commercial-register extracts;
- the share purchase agreement, merger agreement, public offer document or other transaction instrument;
- annual accounts and turnover data for the relevant completed financial years;
- a description of the parties' activities in Morocco and internationally;
- the proposed definition of relevant product and geographic markets;
- market-share estimates, sources and calculation methods;
- information on competitors, customers, suppliers, distribution systems and barriers to entry;
- an analysis of horizontal overlaps, vertical relationships and potential conglomerate effects;
- internal studies, presentations or market reports relevant to the commercial rationale and competitive assessment.
Foreign corporate documents may need to be translated into French or Arabic. Depending on their origin and use, legalisation or apostille questions may also arise. Financial figures should be reconciled with audited accounts and converted into dirhams using a clearly identified exchange-rate methodology.
An incomplete notification does not start the statutory clock. This point causes more transaction delays than many parties expect. Early contact or pre-notification exchanges with the Council's investigation services can help identify missing data, particularly in complex or multi-market transactions.
Phase I: the initial 60-day review
Under Article 15 of Law No. 104-12, the initial examination period is generally 60 days from receipt of a complete notification. The terminology used in transaction documents must be precise: the clock does not necessarily begin when a courier delivers the first set of papers. It begins when the file is treated as complete under the applicable procedure.
During Phase I, the Council may clear the transaction, clear it subject to commitments, or conclude that serious competition concerns justify an in-depth review. The parties can also withdraw the filing if the transaction is abandoned or materially restructured.
Requests for information and the submission of commitments can affect the timetable. In practice, theoretical periods are not always reflected neatly in a closing calendar. Questions about market shares, customer lists or internal documents can significantly extend the preparatory and review process. A comfortable margin is therefore preferable.
Phase II: an in-depth examination
If serious doubts remain, the Council may open an in-depth examination under Articles 18 and 19 of Law No. 104-12. The statutory Phase II period is generally 90 days, subject to the mechanisms for suspension, extension and commitments contained in the law.
This corrects another common misconception: the standard Moroccan model is not simply “60 working days plus another 60 working days.” The actual statutory architecture distinguishes an initial 60-day review and a deeper review generally governed by a 90-day period, with procedural events capable of altering the effective timetable.
For transaction planning, a straightforward filing may still require several months from the first information request to formal clearance. A complex case involving economic analysis or remedies can take longer. Many practitioners reserve four to six months in the M&A calendar, and sometimes more where several jurisdictions are involved.
Filing costs and professional fees
There is generally no administrative filing fee payable to the Moroccan Competition Council comparable to the substantial merger fees charged in some countries. The main cost comes from lawyers, economists, translation, data collection and, occasionally, market experts.
As an indicative market range rather than an official tariff, legal assistance for a full notification may cost approximately MAD 150,000 to MAD 400,000. A simple no-overlap filing may be less expensive. A multi-market transaction involving extensive data, several foreign groups or negotiated remedies may cost considerably more.
Companies can consult Moroccan competition lawyers to obtain a fee proposal tailored to the transaction rather than relying on a generic range.
The standstill obligation: do not close before clearance
A notifiable transaction cannot be implemented, legally or economically, before the Competition Council has authorised it. This is the standstill obligation, often described internationally as the prohibition of “gun jumping.”
The obvious prohibited step is transferring the shares and purchase price. But premature implementation can be more subtle. Risky conduct may include allowing the buyer to direct the target's commercial policy, approve ordinary customer contracts, appoint managers, integrate sales teams or coordinate prices before closing.
Due diligence also creates a separate danger. Before clearance and closing, buyer and target remain independent undertakings. They should not exchange competitively sensitive information more widely than necessary. Current customer-level prices, future bids, detailed margins and future commercial strategies should be handled through controlled procedures.
A clean team may be used for sensitive material. Its members—often external lawyers, accountants or limited internal personnel who do not perform commercial functions—review raw data and provide aggregated conclusions to the deal team.
Drafting the SPA correctly
The share purchase agreement should include a condition precedent requiring the necessary Moroccan clearance. It should allocate responsibility for preparing the notification, answering information requests and deciding whether remedies are acceptable.
The agreement should also contain a realistic long-stop date, often six to twelve months depending on the competitive profile and the number of regulatory filings. Other issues include whether the buyer must offer remedies, whether it is protected against an obligation to sell a material business, and who bears the risk of prohibition.
Interim covenants must protect the value of the target without handing operational control to the purchaser. The distinction is factual and sometimes fine. Requiring consent for an exceptional disposal of a major factory is not the same as requiring consent for every discount offered to an ordinary customer.
How the Competition Council assesses a transaction
The substantive competition test
The Council examines whether the concentration is likely to harm competition, particularly through the creation or strengthening of a dominant position or purchasing power. It may consider market concentration, the strength of competitors, customer alternatives, barriers to entry, access to essential inputs, vertical foreclosure and the risk of coordinated conduct.
Market definition is often decisive. A 35% share may be harmless in a broad, competitive market and much more concerning in a local market protected by licences, logistics constraints or exclusive distribution arrangements.
The Council can seek views from competitors, customers, suppliers, public authorities and sector regulators. Parties must therefore assume that market-share claims may be tested against third-party evidence.
Moroccan merger control draws heavily on concepts familiar from European Union law, including Regulation (EC) No. 139/2004. A practitioner accustomed to European merger review will not feel lost. Yet European solutions should not be transplanted mechanically: Moroccan administrative practice and published decisional material continue to develop, while local distribution structures, import conditions and regulation may produce a different analysis.
Unconditional clearance
If the transaction raises no material concern, the Council may authorise it without conditions. This is common where the parties have no significant horizontal overlap, their market shares are low, or customers have credible alternatives.
Clearance is transaction-specific. It does not immunise unrelated exclusivity clauses, price coordination or non-compete provisions that go beyond what is necessary for the transaction.
Conditional clearance and remedies
Where concerns can be resolved, the parties may offer commitments. Structural remedies include selling a business, brand, production unit or distribution network. They directly change the post-transaction market structure and are often preferred where a clear overlap can be separated.
Behavioural remedies regulate future conduct. Examples include non-discriminatory access to infrastructure, continued supply to third parties, limits on tying, or safeguards against the exchange of confidential information. These remedies require monitoring and must be sufficiently clear to enforce.
Files associated in public reporting with Lone Star attracted practitioners' attention not merely because clearance was obtained, but because they illustrated the more visible and increasingly sophisticated role of the Council in capital transactions. Care is needed when describing any such case: the authoritative source remains the published decision itself, including the precise acquiring entity, target, markets and commitments. A press headline is not a substitute for the operative decision.
Prohibition
The Council may ultimately prohibit a concentration if it creates substantial competitive harm that cannot be remedied adequately. Pure prohibitions remain unusual, partly because parties frequently restructure transactions or offer commitments before reaching that point.
The rarity of prohibition should not be confused with absence of risk. An onerous divestment obligation can alter the economics of a deal almost as significantly as a prohibition. Regulatory risk must therefore be priced and allocated in the SPA.
Penalties for failure to notify and gun jumping
Financial penalties under Article 21
The principal enforcement provisions for failure to notify or unlawful early implementation appear in Article 21 of Law No. 104-12, not Article 19. For a legal person, the financial penalty can reach 5% of the pre-tax turnover achieved in Morocco during the last completed financial year, calculated under the statutory rules. Natural persons responsible for notification may also face a monetary penalty within the ceiling established by the law.
The Council may order the parties to notify within a specified period, reverse the transaction or restore the previous situation, subject to periodic penalty payments where appropriate. If the operation is later found to harm competition, structural or behavioural measures may follow.
One should also avoid overstating the civil-law consequence. Law No. 104-12 provides strong administrative powers and sanctions, but the proposition that every unnotified share transfer is automatically civilly void is not a safe general rule. The validity and enforceability of transaction documents depend on their wording, the mandatory legal rules involved and the relief sought before the competent court. The immediate certainty is simpler: closing without required clearance exposes the parties to serious regulatory enforcement.
Late notification does not erase the breach
A filing made after closing may allow the Council to assess the substance of the deal, but it does not retroactively cure the prior failure to notify or the breach of standstill. This is why voluntary corrective action should be prepared with counsel rather than improvised in correspondence.
In practice, a company discovering a historic acquisition should reconstruct the control structure, turnover at the relevant date and steps already implemented. The response may involve approaching the Council, submitting a late notification and proposing measures to prevent further integration pending review.
Competition due diligence in Moroccan M&A
What should be audited?
A Moroccan competition due diligence should cover more than notification thresholds. The buyer should assess horizontal overlaps, vertical supply relationships, market shares, barriers to entry and the target's existing commercial agreements.
The audit should also look for prohibited conduct under Article 6, abuse of dominance risks under Article 7 of Law No. 104-12, problematic exclusivity, resale-price restrictions, bid coordination and prior contacts with competitors. An acquisition can expose the purchaser to inherited compliance risks even where the transaction itself is cleared.
For substantial transactions, the competition workstream should be coordinated with corporate, tax, employment, foreign-exchange and sector-regulatory reviews. Businesses can contact business lawyers in Casablanca or M&A lawyers in Morocco for an integrated assessment.
Allocating regulatory risk
The SPA should specify who controls the regulatory strategy and who bears the economic cost of remedies. A buyer-friendly clause may allow termination if approval requires disposal of a material asset. A seller may instead seek a “hell or high water” undertaking requiring the buyer to take all steps necessary to obtain clearance.
A material adverse change clause can address certain regulatory developments, but it should not be confused with the merger-clearance condition precedent. The agreement must state clearly what happens if approval is delayed, granted subject to burdensome conditions or refused.
Finally, closing mechanics should require delivery of the Council's decision or other satisfactory evidence that the condition has been fulfilled. A verbal assurance that “the file is progressing well” is not a closing document.
Practical scenarios
A Moroccan SME buys a local competitor
The parties should first determine whether there is an acquisition of control and then apply all current thresholds. If their turnover falls below the turnover tests, they must still examine the 40% market-share route. This is particularly relevant in specialised local markets where two medium-sized operators hold a high combined share.
A company considering a local acquisition may consult commercial lawyers in Casablanca. The analysis should be completed before fixing an unconditional closing date.
A foreign group acquires a Moroccan company
Foreign nationality does not provide an exemption. The purchaser must calculate worldwide group turnover, identify Moroccan turnover across relevant group entities and review the target's Moroccan activities. The filing will usually require group charts, foreign accounts and translated transaction documents.
The Moroccan filing should be coordinated with foreign clearances, but each jurisdiction retains its own thresholds and timetable. Approval in the European Union or another country does not replace authorisation in Morocco.
Two Moroccan operators form a joint venture
The key question is whether the joint venture is full-function and lasting. A company with its own personnel, financing, assets, management and external customers is more likely to be an autonomous economic entity. A vehicle created only to execute instructions from its parents may instead be assessed as a cooperation agreement.
The constitutional documents and reserved-matters schedule should be reviewed for joint control. Parties forming a regional vehicle may seek advice from company lawyers in Marrakech alongside competition counsel.
A bank temporarily acquires securities
The bank should verify every condition of Article 13, including the purpose and duration of the holding and the manner in which voting rights are exercised. If the bank uses those rights to shape competitive strategy or retains the investment beyond the permitted framework, the exemption may cease to be available.
Final recommendations for securing Moroccan M&A transactions
The practical rules are straightforward, even if their application is not. Identify the change of control. Calculate turnover at group level. Test the worldwide, Moroccan and market-share thresholds. Prepare the notification before closing, and preserve the target's commercial independence until formal clearance.
Businesses should normally allow four to six months for a filing workstream, with additional time for transactions likely to enter an in-depth review. The SPA should contain a properly drafted condition precedent, cooperation obligations, remedy provisions and a realistic long-stop date.
The Competition Council is no longer an institution that deal teams can consider after signing. Its published decisions, including closely watched international investment files, demonstrate a maturing enforcement practice. Further regulatory adjustments are possible, so thresholds and filing forms must always be checked against the legislation in force at the date of the transaction.
For tailored assistance, businesses may use AvocatLib to identify competition lawyers in Morocco, Moroccan M&A counsel or business lawyers in Rabat. In merger control, early advice is rarely an unnecessary cost. More often, it protects the agreed price, the closing timetable and the transaction itself.
