Mergers and acquisitions in Nigeria have seen a notable uptick, driven by increasing foreign direct investment, consolidation in the banking and telecoms sectors, and a growing appetite for private equity transactions. Yet the due diligence process in Nigeria carries unique complexities that foreign and domestic acquirers must navigate carefully.
The Nigerian Regulatory Landscape
Any acquisition of a business in Nigeria may trigger approval requirements from several regulators, depending on the sector:
- Federal Competition and Consumer Protection Commission (FCCPC): Merger notifications are mandatory where combined turnover or assets exceed defined thresholds.
- Securities and Exchange Commission (SEC): Public company acquisitions require SEC approval and compliance with the Investments and Securities Act.
- Sector-specific regulators: Banking (CBN), insurance (NAICOM), telecoms (NCC), and energy (NUPRC/NERC) each impose additional approval layers.
Core Due Diligence Workstreams
Legal Title and Corporate Records
Verification of corporate existence, shareholding structure, and any encumbrances on shares or assets is foundational. Nigerian company records at the CAC can be inconsistent; physical verification is often necessary.
Land and Property
The Land Use Act 1978 vests all land in state governors. Any acquisition of land-heavy businesses requires careful analysis of rights of occupancy, consent requirements, and potential for revocation.
