Merger Notification Thresholds in South Africa (2026): a Practical Checklist for Commercial Transactions and Deal Teams

Last reviewed: 13 May 2026

South Africa’s Competition Commission increased the merger notification thresholds and filing fees with effect from 1 May 2026, reshaping the compliance landscape for every M&A transaction that touches the country. The revised thresholds mean that a number of mid-market deals will fall below the notification line for the first time, while transactions that remain notifiable will attract materially higher filing fees and, in many cases, longer clearance timelines. For in-house counsel, private-equity sponsors and international commercial deal teams, the practical question is the same: does this deal need to be notified, what will it cost, and how should the merger notification thresholds in South Africa be managed inside the transaction documents?

This article answers all three questions with a step-by-step checklist, updated fee tables, sample merger-control clauses and a role-allocation workflow ready for immediate deployment.

Snapshot: The 2026 Merger Thresholds South Africa and Filing Fees

Under the Competition Act 89 of 1998, a transaction is classified as a small, intermediate or large merger based on two financial limbs: the combined annual turnover or asset value of the acquiring and target firms (the combined/parties limb), and the annual turnover or asset value of the target firm alone (the target limb). Both limbs must be met for the higher category to apply. The table below summarises the thresholds that took effect on 1 May 2026 as published in the Government Gazette and confirmed by the Competition Commission.

Quick Interpretation, What the Threshold Tests Mean in Practice

Each limb is assessed by reference to the higher of annual turnover or total asset value as reflected in the most recent audited financial statements. Where one party is a foreign acquirer with no South African turnover, the analysis concentrates on the target’s South African operations and the combined South African activity of both groups. The upward adjustment means that a notifiable transaction in South Africa now requires the target alone to clear ZAR 100 million, a meaningful lift from the previous figure.

Industry observers expect the practical effect to be that many small and lower-mid-market sales of business in South Africa will no longer trigger mandatory filing, freeing deal teams to close faster but also requiring careful due-diligence checks to confirm that the transaction genuinely falls outside the thresholds.

Do I Need to Notify? A Notifiable Merger Checklist in Five Steps

The question “do I need to notify my merger in South Africa” should be answered methodically at the LOI or term-sheet stage, well before the signing of any sale-and-purchase agreement. The following five-step M&A compliance checklist offers deal team merger guidance that can be applied to share purchases, asset sales, joint ventures and subscription transactions alike.

1. Calculate the target limb. Obtain the target’s most recent audited financial statements. Identify the higher of annual turnover and total assets. If the figure falls below ZAR 100 million, the transaction is presumptively a small merger and generally not notifiable, but proceed to Step 5 before concluding.
2. Calculate the combined parties limb. Aggregate the annual turnover (or total assets, whichever is higher) of the acquiring group and the target group within South Africa. If the combined figure falls below ZAR 750 million, the transaction remains a small merger regardless of the target limb result.
3. Determine the merger category. Where both limbs are met at the intermediate or large level, the transaction must be notified. Where only the large-merger thresholds on both limbs are exceeded, the transaction is classified as a large merger and requires Commission investigation followed by Tribunal approval.
4. Screen for structural complexity. Consider whether the transaction involves minority stakes, joint-venture formations, asset carve-outs or creeping acquisitions that may alter the control analysis. The Competition Act defines a merger broadly: any acquisition of, or direct or indirect control over, the whole or part of a business. A 20 % shareholding coupled with board-appointment rights could constitute control.
5. Check the Commission’s discretion on small mergers. Even if the deal falls below both thresholds, the Commission may call in a small merger within six months of implementation where it involves a party subject to prior merger conditions, a market with high concentration, or a sector flagged for public-interest scrutiny. Voluntary notification eliminates this risk.

Red flags that warrant immediate competition-counsel review:

• The acquirer and target overlap in one or more product or geographic markets in South Africa.
• The target operates in a sector recently designated for public-interest scrutiny (e.g., healthcare, media, technology).
• The transaction forms part of a series of related acquisitions that, taken together, may exceed the thresholds.
• A prior merger approval imposed conditions that affect the parties or the relevant market.

Worked Example: Share Purchase Where the Target Turnover Exceeds ZAR 100 Million

An international private-equity fund acquires 100 % of a South African logistics company with annual turnover of ZAR 420 million and total assets of ZAR 310 million. The fund’s South African portfolio companies have combined turnover of ZAR 1.2 billion. The target limb (ZAR 420 million) and combined limb (ZAR 1.62 billion) both exceed the intermediate thresholds but fall below the large-merger levels. Result: the transaction is a notifiable intermediate merger requiring filing with the Competition Commission.

Worked Example: Asset Sale Spanning Multiple Jurisdictions

A multinational group sells a South African manufacturing division (assets ZAR 85 million, turnover ZAR 92 million) to a local buyer with ZAR 900 million turnover. The target limb is assessed on the South African operations being acquired. Because neither the asset value nor the turnover of the division reaches ZAR 100 million, the transaction is a small merger and is generally not notifiable. However, the overlap between the buyer’s existing products and the target’s product lines makes voluntary notification prudent to avoid a later call-in.

Competition Commission Filing Fees, Timelines and Penalties

The revised filing-fee schedule, gazetted alongside the threshold changes and effective from 1 May 2026, introduces higher fee bands. Filing fees must be paid at the time of filing; the Commission will not accept an incomplete filing without proof of payment.

Penalties for non-notification are severe. The Competition Act empowers the Commission to investigate and refer an unnotified, implemented merger to the Tribunal. The Tribunal may impose an administrative penalty of up to 10 % of the merged entity’s annual turnover, order divestiture or unwind the transaction entirely. Early indications suggest the Commission is signalling a firmer enforcement posture on gun-jumping, implementing a merger before clearance, which reinforces the importance of building merger-control compliance into the transaction timetable from the outset.

How Long Does Clearance Take?

For intermediate mergers, the Commission has a statutory 20-business-day initial phase (Phase I), extendable by a further 40 business days where concerns are identified (Phase II). Large mergers follow the same Commission timeline but must then be confirmed or prohibited by the Tribunal, which adds a further hearing and adjudication cycle. In practice, a straightforward intermediate merger with no overlapping markets or public-interest concerns can expect clearance within 25 to 30 business days. Complex or contested filings regularly extend beyond 60 business days, and large mergers involving Tribunal hearings can take four to eight months from filing to final order.

How to Draft Merger Control Clauses: Sample Language and Drafting Notes

The revised merger notification thresholds in South Africa create direct drafting implications for commercial agreements. The sample merger-control clauses below are modular, designed to be adapted and inserted into share-purchase agreements, asset-sale agreements and subscription agreements. Each clause is accompanied by practical drafting notes identifying negotiation traps and fallback positions.

Pre-Closing Condition, Regulatory Clearance

Sample clause:

“Completion shall be conditional upon the Competition Commission of South Africa (and, in the case of a large merger, the Competition Tribunal) having approved the Transaction unconditionally, or subject only to conditions acceptable to the Purchaser acting reasonably, in accordance with Chapter 3 of the Competition Act, 1998. If such approval has not been obtained by the Long-Stop Date, either Party may terminate this Agreement by written notice.”

Drafting note: The phrase “conditions acceptable to the Purchaser acting reasonably” is the most frequently negotiated element. Sellers will press for “conditions not materially adverse to the Business,” while purchasers, especially financial sponsors, prefer unqualified discretion. A fallback is to attach a schedule listing unacceptable condition categories (e.g., divestiture of more than a specified percentage of target revenue, employment guarantees exceeding a defined cost threshold).

Interim Covenants, Standstill and Preservation of Business

Sample clause:

“From the Signature Date until the earlier of Completion or termination of this Agreement, the Seller shall procure that the Target carries on its business in the ordinary course consistent with past practice, and shall not, without the prior written consent of the Purchaser, take or permit any action that would constitute implementation of the merger as contemplated in section 13A of the Competition Act.”

Drafting note: Gun-jumping risk is the primary concern. Ensure the covenant captures both positive obligations (maintain business, preserve customer relationships) and negative prohibitions (no material capital commitments, no senior management changes). Include a carve-out for actions required by law or regulation to avoid an unworkable straitjacket.

Break Fee and Reverse Break Fee, Competition Carve-Out

Sample clause:

“If this Agreement is terminated solely because the Regulatory Clearance Condition has not been satisfied by the Long-Stop Date, the Purchaser shall pay to the Seller a break fee equal to [●] % of the Purchase Price within 10 (ten) Business Days of such termination (the ‘Reverse Break Fee’). No Reverse Break Fee shall be payable if the failure to obtain Regulatory Clearance results from facts, circumstances or conduct attributable to the Seller or the Target.”

Drafting note: In South African deals, reverse break fees typically range from 1 % to 3 % of deal value. The competition carve-out (final sentence) is standard: if the Commission blocks the deal because of the seller’s market position or undisclosed overlaps, the purchaser should not bear the financial burden. The corresponding seller break fee (if the seller walks) usually mirrors the reverse break fee amount.

Representations and Warranties, Notification and Compliance

Sample clause:

“The Seller represents and warrants that: (a) neither the Seller nor the Target is currently subject to any merger condition, consent order, or undertaking imposed by the Competition Commission or the Competition Tribunal; (b) to the best of the Seller’s knowledge, there is no fact or circumstance relating to the Target that would reasonably be expected to result in the Competition Commission prohibiting or imposing material conditions on the Transaction; and (c) the Seller has disclosed to the Purchaser all correspondence with the Competition Commission or the Competition Tribunal during the preceding 36 months.”

Drafting note: Representation (a) is critical, prior merger conditions can cause a current deal to be called in even if it falls below the thresholds. Ensure the disclosure schedule is populated during due diligence with any existing Commission correspondence or prior undertakings.

Escrow and Holdback, Extended Clearance Delays

Sample clause:

“In the event that Regulatory Clearance has not been obtained within [90] days of the Signature Date, the Purchaser may elect to deposit [●] % of the Purchase Price into an escrow account held by [escrow agent], to be released to the Seller upon satisfaction of the Regulatory Clearance Condition or returned to the Purchaser upon termination.”

Drafting note: Escrow clauses are increasingly common in large-merger transactions where Tribunal hearings may extend the clearance horizon to six months or more. The escrow percentage and interest-allocation mechanism are negotiated deal-by-deal.

Allocation of Filing Fees and Professional Costs

Sample clause:

“The Purchaser shall bear the filing fee payable to the Competition Commission. Each Party shall bear its own legal and advisory costs in connection with the preparation and prosecution of the merger notification. Any costs associated with meeting conditions imposed by the Commission or the Tribunal as part of the approval shall be allocated as set out in Schedule [●].”

Drafting note: Market practice in South Africa allocates the statutory filing fee to the purchaser (consistent with the purchaser’s role as the primary filing party). However, condition-implementation costs, such as a divestiture process or the cost of an independent monitoring trustee, are frequently shared or allocated to the party whose market position triggered the condition.

Practical Workflows and Deal Team Merger Guidance

A smooth clearance process depends on early planning. The workflow below maps the key stages from LOI to post-closing, with an emphasis on the steps most affected by the 2026 changes to merger notification thresholds in South Africa.

1. LOI / term-sheet stage: Run the five-step checklist above. Engage competition counsel (external or internal) to confirm merger category and identify potential public-interest concerns. Factor realistic clearance timelines into the deal timetable and long-stop date.
2. Due-diligence stage: Collect the financial data required for both limbs. Identify horizontal and vertical overlaps. Prepare a preliminary market-definition analysis. If a clean-team protocol is needed for competitively sensitive information, implement it now.
3. Signing: Include merger-control clauses (see samples above). Agree on the filing-fee allocation and the information-sharing protocol between parties for the filing.
4. Filing: Lodge the notification (CC4 form for intermediate mergers, CC13 form for large mergers) with the Competition Commission. Pay the filing fee simultaneously. Ensure confidential treatment is requested for commercially sensitive data.
5. Clearance / closing: Monitor the Commission’s Phase I clock. Respond to information requests within the statutory timeframes. If conditions are proposed, evaluate against the pre-agreed acceptability framework in the SPA. Obtain final clearance (and, for large mergers, Tribunal approval) before implementing the transaction.

Role Matrix, Who Does What

Reporting Obligations by Entity Type, Comparison Table

The notification analysis varies depending on the transaction structure. The comparison table below maps common deal types to their typical notification triggers and highlights practical nuances that deal teams should keep in mind when assessing whether a notifiable transaction in South Africa arises.

Sources

1. Competition Commission of South Africa, Merger Thresholds
2. Competition Tribunal of South Africa, Merger Notifications & Procedures
3. Werksmans Attorneys, South Africa Merger Notification Thresholds and Filing Fees Increase from 1 May 2026
4. Eversheds Sutherland, South Africa’s New Merger Notification Thresholds: Key Considerations
5. Cliffe Dekker Hofmeyr, New Merger Thresholds and Increased Filing Fees for South Africa Now Effective
6. Mergerfilers, South Africa Country Guide
7. Polity, South Africa Merger Notification Thresholds and Filing Fees Increase from 1 May 2026