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MyCC’s Green Light for M&As soon?


Competition law contains three (3) pillars being: (1) prohibition of anti-competitive agreements; (2) prohibition on the abuse of dominant position and (3) merger control regime.

The Competition Act 2010 of Malaysia (“Act”) prohibits anti-competitive agreements and the abuse of dominant position in the market has been in force since 1 January 2012. However, as it currently stands, Malaysia is the only country in Southeast Asia that does not have merger control provisions.

On 25 April 2022, the Malaysia Competition Commission (“MyCC”) launched an online public consultation on the proposed amendments to the Act to seek comments and feedback from the public to submit their written input to MyCC by 27 May 2022. The proposed amendments to the Act includes, amongst others, the introduction of a merger control regime that will provide MyCC with the power to review and investigate mergers transactions that are likely to cause market concentration (“Proposed Amendments”).


(1) What is “merger” or “anticipated merger”?

There are four circumstances in which a “merger” is said to have occurred:

  1. a) two or more previously independent enterprises combine into one single enterprise and cease to exist as separate legal entities;
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  3. b) the acquisition of direct or indirect control of the whole or part of one or more enterprises;
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  5. c) the acquisition of assets of one enterprise by another enterprise results in the acquiring enterprise replacing or substantially replacing the enterprise whose assets are being acquired, in the business or the part concerned of the business, in which the acquired enterprise was engaged immediately before the acquisition; or
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  7. d) the creation of a joint venture to perform, on a lasting basis, all the functions of an autonomous economic entity.
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An enterprise shall be deemed as having control of another enterprise where such enterprise has conferred the possibility of exercising decisive influence on the other enterprise by reason of rights, contracts or any other means either separately or in combination.1

Anticipated merger” refers to any form of contract, arrangement or understanding, whether or not legally enforceable, between enterprises, that is in progress or contemplation and that, if consummated, will result in the occurrence of a “merger” referred to in the above.


(2) What is NOT “merger”?

The four circumstances listed below in which a commercial or economic activity in the market does NOT amount to a “merger”:

  1. a) the control is acquired by a person acting in his capacity as receiver or liquidator or an underwriter;
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  3. b) all of the enterprises involved in the merger are, directly or indirectly, under the control of the same enterprise;
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  5. c) the control is acquired solely as a result of a testamentary disposition, intestacy or the right of survivorship under a joint tenancy; or
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  7. d) the control is acquired by an enterprise whose normal activities include the carrying out of transactions and dealings in securities for its own account or for the account of others in the circumstances specified below:
    1. i) the securities are acquired are on a temporary basis (calculated 12 months from the date on which control of the other enterprise); and
    2. ii) the acquiring enterprise must not exercise the voting rights with a view to determining the strategic commercial behaviour of the target enterprise or must exercise these rights only to prepare the total or partial disposal of the enterprise, its assets or securities.


(3) What is “merger control”?

The definition of “merger control” is not provided for by MyCC in the Proposed Amendments.

Merger control can be understood as to refer to the procedure of reviewing mergers and acquisitions under antitrust/competition law[1].

MyCC has proposed that any merger control regime based on competition law must establish a substantive standard for determining whether a particular merger should be amended or prohibited, and when a government decides to implement a merger control system as part of its competition law framework, it must first select which substantive criterion it will apply to evaluate whether a merger should be allowed or prohibited based on competition law principles.

MyCC has proposed to adopt the “substantial lessening of competition” test (also known as “SLC”) as the substantive standard for assessing the anti-competitive effects of mergers in Malaysia. MyCC however has not provided guidance on SLC in the Proposed Amendments.

In short, any merger or anticipated mergers transacted within and outside of Malaysia has an effect on competition in any market in Malaysia is subject to the merger control regime, and any mergers that result or an anticipated merger, if consummated, may result in a SLC within any market for goods or services is prohibited (“Prohibition”).


(4) Why “merger control”?

The basis for the introduction of the merger control regime by MyCC in Malaysia are as follows:

  1. a) lacuna of the Act – which results in MyCC unable to intervene in any merger transactions that result in a SLC of the merger transactions, and consequently the enterprises may exploit the merger transactions to legalise their cartel, which may undermine the competition process;
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  3. b) addressing the issues for the increasing cost of living – mergers that result in a SLC in the market may lead to economic sabotage, which consequently has derailed the efforts to assist marginalised groups and distort Malaysia’s economic growth in the long term; and
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  5. c) creation of monopolies and concentrated market – unmonitored merger transactions may lead to the creation of monopolies that result in a concentrated market, which may pose a high barrier to entry for new players in a market and impede the innovative incentive for enterprises.


(5) What should the parties to the mergers and acquisitions (“M&As”) do?

Parties’ obligations would therefore depend on whether it is a mandatory notification or voluntary notification requirement based on the threshold prescribed by MyCC:


  1. a) Mandatory notification

If the anticipated mergers exceed the threshold to be prescribed by MyCC through an order published in the Gazette (“Threshold”), parties to notify MyCC before the consummation of the anticipated mergers. The Threshold has not been announced by MyCC in the Proposed Amendments. Further, MyCC also has the power to review the sufficiency of the Threshold and amend the Threshold, through an order published in the Gazette.

After notification to MyCC, parties are to provide additional information/document required by MyCC according to the timelines set by MyCC (if applicable), and parties shall not consummate the anticipated merger that was notified before receiving the approval from MyCC/gun jumping.

MyCC is required to issue its decision on the anticipated merger that was notified to it within 120 working days from the date when MyCC accepts the notification is complete.

If MyCC has not made any decision with regards to the anticipated merger that was notified upon the expiry of the 120 working days merger review period, the anticipated merger shall be deemed to be approved and the parties to the anticipated merger may proceed to consummate the merger.

The 120 working days of merger assessment may be stopped or suspended by MyCC when:

  1. i) MyCC requests further information from the enterprises;
  2. ii) The enterprise seeks an extension of time to file for their written representation;
  3. iii) The enterprise wants to make an oral representation; or
  4. iv) The enterprise submits a commitment offer, i.e. a commitment that was given by the enterprise to MyCC to remedy, mitigate or prevent SLC caused by the merger or anticipated merger.
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MyCC would not take more than 40 working days to review and approve an application but the process may stretch for another working 80 days for in depth assessment to determine if an anticipated merger, if consummated, will cause SLC effect in the market (if necessary).

The application can be:

  1. i) approved without condition – where enterprises can consummate their mergers;
  2. ii) approved with conditions – where the transaction was approved with a commitment that addresses SLC concerns; or
  3. iii) rejected – where enterprises will be prohibited from consummating the anticipated merger due to SLC concerns.
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Parties who are displeased with the merger-related decisions issued by MyCC can appeal to the Competition Appeal Tribunal (“CAT”), which will be provided with exclusive jurisdiction to review/hear appeals relating to the merger-related decisions issued by MyCC. The right of appeal against the decisions of CAT at the High Court will be limited to the following:

  1. i) on a point of law arising from a decision of the CAT; or
  2. ii) from any decision of CAT as to the amount of a financial penalty.
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The High Court, upon hearing the appeal, may:

  1. i) confirm, modify or reverse the decision of the CAT; and
  2. ii) make such other order as the High Court thinks fit.
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  4. b) Voluntary notification

If the mergers or anticipated mergers do not exceed the Threshold, parties to voluntarily notify MyCC whether before or after the mergers or anticipated mergers have been consummated. Parties will not be subject to 120-working days merger assessment period by MyCC.


(6) What if parties to the M&As fail to notify MyCC for an anticipated merger that exceeds the Threshold OR the parties to the M&As have notified MyCC but proceed to close/consummate the anticipated merger that exceeds the Threshold without obtaining the approval from MyCC? Any relief of liability?

An anticipated merger shall be deemed to have been consummated if the anticipated merger results in the occurrence of a merger referred to in item (1) above. As a result, failure to adhere to the requirement not to consummate the anticipated merger/gun jumping would result in a merger violation and the anticipated merger that has been consummated shall be rendered void.

MyCC has the power to impose a financial penalty of up to ten per cent (10%) of the value of the merger transaction or anticipated merger transaction on the enterprise that has committed a merger violation. Further, MyCC has the power to prescribe the manner of calculating the value of a merger transaction or anticipated merger transaction for the purposes of imposing the financial penalty by an order published in the Gazette.

Enterprises are provided with an avenue to relieve their liability from the Prohibition on the basis that the economic efficiencies of the merger or anticipated merger outweigh any adverse effect from SLC effect caused by the merger or anticipated merger, and any enterprises claiming the benefit bear such burden to establish the existence of economic efficiencies.


(7) Any exclusion from the merger control regime stated above?

The Act currently excludes the commercial activities regulated under the following legislations:

  1. a) Communications and Multimedia Act 1998, which is subject to the scrutiny of the Malaysia Communications and Multimedia Commission (“MCMC”);
  2. b) Energy Commission Act 2001, which is subject to the scrutiny of the Energy Commission of Malaysia (“Energy Commission”);
  3. c) Petroleum Development Act 1974 and the Petroleum Regulations 1974 in so far as the commercial activities regulated under these regulations are directly in connection with upstream operations comprising the activities of exploring, exploiting, winning and obtaining petroleum whether onshore or offshore of Malaysia, which is subject to the scrutiny of Petroliam National Berhad (PETRONAS); and
  4. d) Aviation Commission Act 2015, which is subject to the scrutiny of Malaysian Aviation Commission (MAVCOM).

One recent example would be MyCC announced on 2 July 2022 that MyCC was aware of repeated calls for MyCC to intervene in the proposed merger between Digi Bhd (Digi) and Celcom Axiata Bhd (Celcom) (“Proposed Merger”). However, since the Act does not apply to, amongst others, telecommunications and multimedia sector (which is subject to the scrutiny of the MCMC), MyCC would therefore leave such matters relating to the Proposed Merger to the wisdom of MCMC.

The Proposed Amendments further expand the exclusion from the Act the following legislations/mergers:

  1. a) Postal Services Act 2012, which is subject to the scrutiny of MCMC;
  2. b) Gas Supply Act 1993, which is subject to the scrutiny of the Energy Commission;
  3. c) mergers between enterprises licensed or approved or registered or prescribed by the Finance Minister or the Central Bank of Malaysia (BNM) under the following legislations:
    1. i) Financial Services Act 2013;
    2. ii) Islamic Financial Services Act 2013;
    3. iii) Money Services Business Act 2011; and
    4. iv) Development Financial Institutions Act 2002;
  4. d) mergers between enterprises licensed or approved or registered by the Finance Minister or the Securities Commission of Malaysia (SC) under the following legislations:
    1. i) Capital Markets and Services Act 2007; and
    2. ii) Securities Industries (Central Depository) Act 1991;
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  5. (e) mergers between enterprises licensed or approved or registered by the Labuan Financial Services Authority (Labuan FSA) under the following legislations:
    1. i) Labuan Financial Services and Securities Act 2010; and
    2. ii) Labuan Islamic Financial Services and Securities Act 2010; 
    3. .
  6. (f) mergers between enterprises licensed by the National Water Services Commission (“SPAN”) under the Water Services Act 2006;
  7. (g) mergers to the extent they are engaged in order to comply with a legislative requirement; and
  8. (h) mergers carried out by an enterprise entrusted by the Federal or State Government, as the case may be, with the operation of services of general economic interest or having the character of a revenue-producing monopoly in so far as the Prohibition would obstruct the performance of the task assigned to the enterprise.



It was reported that MyCC will soon be given the power to regulate M&As once the parliament approves the Proposed Amendments, which is expected to be tabled by end of year 2022. It was further reported that the market will be given a one-year grace period to be familiar with the new merger control regime.[2]

Companies which intend to undertake M&As to take note of and familiarise themselves with the Proposed Amendments (which includes, but not limited to, the content highlighted above) and the final amendments to the Act (when available)[3], and to actively engage with the relevant regulators early to ensure that the targeted timeline for their M&As is met[4] when the final amendments to the Act come into force.

In relation to the documentation for M&A when the final amendments to the Act come into force, parties are to take note for the pre-merger notification to MyCC and clearance/approval from MyCC to be made as a condition precedent to the completion/closing of such M&As should they exceed the Threshold since that parties to such M&As are not allowed to consummate/close the deals until the clearance/approval from MyCC is obtained.


This article dated 13 July 2022 is contributed by Maple Chieng for general information only and is not a substitute for legal advice.

[1] https://en.wikipedia.org/wiki/Merger_control

[2] https://www.theedgemarkets.com/article/firms-seeking-mas-may-need-obtain-myccs-nod-2024

[3] In particular, on the Threshold and the guidance on SLC which have not been announced.


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About the Author

Maple Chieng Hea Fong


Halim Hong & Quek


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