We hereby inform the business community and other interested parties of the exemption from penalties for non-compliance with competition legislation granted by the Competition Regulatory Authority (ARC). In effect, by means of a Notice dated 6 January 2025, the ARC published that concentration of companies transactions carried out up to 31 December 2024 and which, under the terms of the legislation in force, had to be notified and, in breach of the law, were not, will be exempt from the penalties arising from such breach for a period of 6 months from 6 January.

The Competition Law defines a "business concentration" as an "act consisting of the merger of two or more previously independent companies, the acquisition of direct or indirect control of a company or a part of one or more companies or the creation or acquisition of a joint venture which performs on a lasting basis the functions of an autonomous economic entity". Under the terms of this Law, a concentration can occur with the (i) acquisition of all or part of a company's share capital; (ii) acquisition of ownership, use or enjoyment rights over all or part of a company's assets; and (iii) acquisition of rights or conclusion of contracts that confer a preponderant influence on the composition or resolutions of a company's bodies. Business concentrations are subject to prior notification to the ARC when they fulfil certain conditions.

Mozambican legislation lays down 3 types of conditions, namely market share, turnover and monthly invoicing or combined (combination of market share and turnover and monthly invoicing). Under the terms of the Competition Regulation, prior notification of concentration operations is made by filling in the appropriate form, in which the relevant information will be indicated and the requested documentation will be attached, in accordance with the Regulation on Notification Forms for Company Concentrations Operations, approved by Resolution no. 1/2021, published in the Official Gazette (Boletim da República) no. 76, Series III, of 22 April 2021.

It should be noted that the Competition Law provides fines for different types of offences, including failure to notify concentrations that require mandatory prior notification. In addition, other more serious economic consequences may fall on investments or transactions in progress, affecting the business, as indicated in Article 25(2) of the Competition Law, which states that the validity of the business that must be notified depends on compliance with this requirement.

According to the aforementioned legislation and, as emphasised by the Notice we have referred to, ARC has a period of up to 5 years from the date of the transactions to apply the legally applicable measures to transactions that were concluded in breach of the notification requirement.