K750,000 Penalty for Failing to Meet Merger and Acquisition Threshold

Companies engaging in mergers and acquisitions in Papua New Guinea need to be aware of the consequences of not meeting specific thresholds. If the transaction value exceeds K50 million or there is a potential market share of 50% or more, a fine of K750,000 may be imposed. Paulus Ain, Commissioner of the Independent Consumer and Competition Commission (ICCC), shared this during the PNG Investment Conference 2024, emphasizing the importance of following these rules.

Ain mentioned that submitting a notification to the ICCC for clearance or authorization is a must if these thresholds are met. Failure to do so could lead to the hefty penalty. The ICCC’s focus on scrutinizing M&A activities comes from concerns about market dominance and reduced competition, leading to amendments in the ICCC Act in 2018 to make M&A notifications mandatory.

The process requires acquirers to notify the ICCC for clearance of their proposed merger or acquisition. The ICCC then has the authority to clear, decline, or direct the acquirer to seek authorization for the deal. Despite challenges faced in monitoring M&A in the past, the ICCC aims to ensure fair competition and consumer protection through this strengthened regulatory framework.