𝐍𝐢𝐠𝐞𝐫𝐢𝐚’𝐬 𝐅𝐢𝐧𝐭𝐞𝐜𝐡 𝐌&𝐀 𝐄𝐧𝐭𝐞𝐫𝐬 𝐭𝐡𝐞 𝐀𝐧𝐭𝐢𝐭𝐫𝐮𝐬𝐭 𝐄𝐫𝐚: 𝐖𝐡𝐚𝐭 𝐭𝐡𝐞 𝐅𝐂𝐂𝐏𝐂 𝐍𝐨𝐰 𝐌𝐞𝐚𝐧𝐬 𝐟𝐨𝐫 𝐃𝐞𝐚𝐥 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲

In our previous edition, we examined how fintechs scale through acquisitions and why legal and regulatory design is critical to sustainable growth. Using the reported Flutterwave–Mono transaction as a reference point, we explored how licensing, data governance, and deal structure can shape post-merger outcomes.

The momentum of consolidation in Nigeria’s fintech ecosystem shows no signs of slowing. Reports have emerged of Paystack’s acquisition of Ladder Microfinance Bank, a transaction that gives Paystack a regulated microfinance banking licence, enabling it to expand into deposit-taking and lending. Deals of this nature signal a strategic pivot toward deeper vertical integration. Payment platforms are no longer just expanding their product suites; they are moving to own the infrastructure within their own value chains. While these transactions are commercially logical, they concentrate market power in ways that inevitably attract regulatory scrutiny.

This edition shifts focus to a less visible, yet increasingly decisive regulator: the Federal Competition and Consumer Protection Commission (FCCPC). Building on the earlier analysis, this brief examines when FCCPC merger notification is required, how the Commission evaluates fintech mergers, and the competition risks that can reshape or stall high-growth deals.Top of Form

Why Competition Law Now Shapes Fintech Consolidation

For years, Nigeria’s fintech sector viewed regulatory risk almost exclusively through the lens of the Central Bank (CBN) prudential guidelines. Competition law was seen as a hurdle for legacy conglomerates, not fast-scaling technology firms. That assumption is no longer sustainable. As fintechs scale, their competitive advantage is no longer driven solely by product quality or software engineering. It is rooted in network effects, proprietary data, and control over critical financial infrastructure

When a payment platform acquires a bank or an open-banking provider, it is not merely adding a feature; it is consolidating rails of the broader ecosystem. These deals can reshape market dynamics by controlling who gets access to merchants, consumers, and financial data. This shift places the FCCPC at the center of strategic deal planning. Unlike the CBN, which focuses on financial stability and licensing, the FCCPC evaluates how transactions reshape market structure and consumer protection. Put simply, the Commission’s mandate and overview extend to transactions that:

• Entrench Dominance: Making it impossible for smaller players to enter the market.
• Limit Access: Restricting competitors’ ability to use essential financial infrastructure.
• Stifle Innovation: Weakening future competition by “buying out” potential rivals before they become threats.

What Types of Fintech Deals Trigger FCCPC Review?

Not all fintech acquisitions raise the same level of competition risk. In Nigeria, the FCCPC classifies transactions based on their size and potential impact on market structure. Understanding these categories is important because they determine whether notification is mandatory, voluntary, or post-closing.

Large Mergers: Mandatory Notification

A transaction qualifies as a large merger where either:

• the combined annual turnover or assets of the merging parties exceed ₦1 billion, or
• the target entity alone has annual turnover of at least ₦500 million.

In such cases, prior notification to, and approval from, the FCCPC is mandatory. This threshold is frequently triggered in fintech transactions because platform businesses scale revenue rapidly and attract high valuations. Closing a large merger without FCCPC approval (commonly referred to as “gun-jumping”). Section 96(7) of the FCCPA authorises administrative penalties of up to 10 percent of the undertaking’s annual turnover in the preceding business year and empowers the Commission to unwind or invalidate the transaction.

Small Mergers: Lower Threshold, Real Risk

Transactions that fall below the statutory thresholds described above are classified as small mergers. While prior approval is not mandatory, the FCCPC, within six (6) months after implementation, may require the parties to notify it and share details of the merger if, in the FCCPC’s opinion, the deal may substantially prevent or lessen competition. In practice, small fintech mergers can still attract regulatory scrutiny, where they:

• concentrate control over key technology, data, or infrastructure;
• create barriers to market entry or entrench a dominant position;
• eliminate an effective or emerging competitor;
• generate efficiency gains that are not passed on to consumers; or
• raise public interest concerns.

As a result, even transactions that appear modest in size can carry meaningful competition risk, especially in fintech markets shaped by network effects and platform dependency.

What Counts as a “Merger”?

The Federal Competition and Consumer Protection Act (FCCPA) adopts a broad definition of a merger. Beyond straightforward share acquisitions, review can be triggered by:

• asset acquisitions;
• joint ventures;
• arrangements conferring control or material influence; or
• restructurings that effectively combine competing businesses.

For fintechs, this means that transactions structured as partnerships or strategic investments can still fall within FCCPC’s merger control framework if they alter competitive dynamics.

FCCPC Review Outcomes and Practical Deal Structuring

Once a transaction falls within the FCCPC’s scope, compliance extends far beyond filing a notification. Deal teams must account for regulatory timelines, information disclosure obligations, and strict limits on pre-closing integration. These considerations increasingly shape how fintech transactions are structured, sequenced, and priced. Following its review, the FCCPC may:

• Approve the merger unconditionally, allowing the deal to proceed as structured;
• Approve the merger with conditions, requiring behavioural or structural remedies such as maintaining open API access, ring-fencing data, divesting certain assets, or committing to interoperability and non-discriminatory pricing; or
• Prohibit the merger, effectively preventing the transaction from closing.

To manage these outcomes, fintech acquirers must build the following into their deal architecture:

• Extended Timelines: Regulatory bureaucracies can shift closing dates, impacting valuation and deal certainty.
• Condition Precedents: The Sale and Purchase Agreement (SPA) or any other definitive agreement must explicitly tie closing to FCCPC approval/clearance, among other things.
• Gun-Jumping Protections: To avoid steep penalties, parties should use “Clean Team” arrangements and defer operational integration until formal approval.
• Strategic Engagement: Proactively seeking Negative Clearance from the FCCPC can resolve regulatory ambiguity early, reduce execution risk, and avoid last-minute restructuring to address FCCPC’s concerns.

Conclusion: The New Strategic Necessity

Nigeria’s competition/antitrust framework is designed to protect the conditions that allow fintech innovation to thrive. The collapse of Visa’s proposed $5.3 billion acquisition of Plaid in 2021, following a U.S. Department of Justice antitrust challenge, illustrates a global regulatory trend toward blocking acquisitions that eliminate nascent rivals or concentrate control over critical data infrastructure.

As fintech consolidation accelerates in Nigeria, the FCCPC’s scrutiny will only intensify. Competition law/regulation has moved from a peripheral concern to a core determinant of deal success. It increasingly decides whether a transaction closes cleanly, is slowed down by regulatory review, or fails altogether. For founders, acquirers, and investors, early competition analysis is no longer a procedural formality; it is now a strategic necessity for any acquisition-led growth strategy. Bottom of Form

Disclaimer: This newsletter is provided for general informational purposes only and does not constitute legal advice. Regulatory obligations may vary depending on the industry and specific processing activities. Professional legal advice should be obtained before taking action.

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