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International Corporate / M&A - Cameroon

posted 12 months ago


Aurélie Chazai



+237 6*****
Aurélie Chazai
Chazai Wamba

Our firm has two main departments: advisory and litigation.

The advisory department is made up of a team of counsels who handle all the extra judicial legal aspects of the firm. This department is structured according to the different services we offer such as corporate law and Mergers & Acquisitions, banking and finance, private equity, capital markets, intellectual property and technology, public Law, Public Procurement & Public-Private Partnerships all based on our counsel’s expertise.

The litigation department mostly handles all the contentious procedures such as labour disputes, land disputes, commercial disputes and others before our local courts.

We are a law firm that uses new technologies and the most modern working methods. We are characterised by our cultural diversity, our integration and above all by the gender balance in our firm. We guarantee our clients a fast, clear and complete assistance in accordance with the best international practices and standards.

Our particularity lies in the fact that the firm is a team of young and dynamic lawyers experienced in diverse aspects of law and belonging to different bar associations in the region and abroad who can swiftly handle the legal issues they are in charge of.

The Cameroonian corporate legislation is governed by the Organization for the Harmonization of Business Law in Africa (OHADA) law which is applicable in the seventeen (17) OHADA member States. Since Cameroon is a signatory State member, the aforementioned law is applied in Cameroon. The law which specifically regulates commercial companies is the Uniform Act on commercial companies and economic interest groups. A practical merit of the OHADA law is that it facilitates our collaboration with other law firms located in the OHADA zone. Also, it is easy for us to extend our operation to neighbouring countries who are OHADA State members since we are subject to the same governing law. As a dynamic law firm, we also advise foreign clients who contact our law firm for corporate-related issues regardless of their jurisdiction provided we make use of their company or corporate acts. It should be noted that these OHADA laws can be completed at the national level, if deemed necessary. This is the case of Cameroon where decrees and laws are often promulgated as additional provisions to the OHADA law.

Our legislation will differ to that of the neighbouring jurisdictions who are not OHADA State members since they apply their national texts or those of the regional institutions they are signatories to. There are no complexities since we examine their governing laws whenever we work with them depending on the transaction on which we are collaborating. If it is a transaction taking place in the OHADA zone, they will as well make use of the OHADA law or refer to a law firm like ours which operates in the OHADA zone.

Our current workflow is well structured and the outcome is remarkable. We often receive a good number of proposals at the same time. We quickly go through them and dispatch them to our various departments where they are examined to determine the feasibility of the mission in order to appropriately communicate to the client our availability and possible conflicted position.

Once it is done, we revert to the client with our fee proposal and time frame based on the complexity of the mission and our experience of such cases.

When our schedule is time and deliverables eminent, we classify the tasks ahead according to our priorities.

Generally clients ask for a memorandum or a series of questions to be answered before properly embarking on the mission. When they have a precise view of what they actually want and the legal approach to it we can therefore properly deep dive into the subject.

Looking at the corporate matters the clients often bring to us in the present climate, we have a considerable demand in banking and finance, mergers & acquisitions, capital markets, private equity, corporate finance, public private partnership, public procurement just to name the consistent ones.

Looking particularly at mergers and acquisitions which is our core subject, we have recently been repeatedly approached by clients to assist them at the country level, in the CEMAC zone and in the entire region. The client often necessitates our assistance at different levels of the transaction or for a particular task based on the project. It is mostly for the due diligence of the target which could be a locally based entity and our clients a foreign entity or a foreign law firm contacted by his peers to assist with the merger or acquisition of an undertaking which is either located in our region or having control over assets in our country or region.

Apart from due diligences, we are also approached to assist with the proper M&A transaction. In this case we have to prepare the entire legal documents of the transaction and at the end provide our legal opinion.

Above all, what we are recently loaded with in the present climate is the notification of concentration operations at the CEMAC competition commission and other competition commissions in the region. We have successfully filed and received authorisations for a good number of concentration operations for clients who are desirous to merge their entities or acquire entities either located or doing business in our region.

We believe it happens this way because the economy is becoming more dynamic in the region and economic operators have raised awareness on the importance of being assisted by local counsels from the beginning of their transaction to avoid doing it twice or losing everything. Besides, the legislation is up to date with the current economic trends therefore facilitating the operation of both the legal practitioners and the users. Since we have experts who are familiar with the procedure and follow up the work diligently, clients communicate amongst themselves and we experience a growth in demand in those services.

An example of a case we recently had was the filing of an M&A transaction at the CEMAC competition commission. Our mission was to assist our client with the filing and the follow up of the procedure before the CEMAC commission but we ended up going through the entire operation’s documents of the client to determine if it was a merger or an acquisition and above all if the operation was in conformity with the requirements of the CEMAC regulation before we could proceed with the mission were initially contacted for. Very often, companies from outside our market come with pre-established notifications that do not always fit the model required by the regulator. We take care of modifying the notification according to the regulator’s standards. If necessary, we review the information contained in the notification as well as the documents to be attached to the notification. We facilitate their procedure with the experience we have of the field.

In our experience, we have observed that the inflation slows down the M&A landscape leading to difficulties in the activity. This generally has an impact on the seller’s expectations in terms of valuation of his business. Moreover, when the buyers have a gloomier outlook as to the future of the business, it deteriorates the situation. We have also noted that credits are becoming more tightened. This phenomenon has a negative effect on the gap between the buyers’ bid and the sellers’ offer. The spreads are definitely widening. As an example, we were involved in a M&A operation where the shareholder of a company was forced to sell out its controlling shares of the company in order to avoid an eminent bankruptcy resulting from inflation. They became less motivated and uncertain about the future and therefore preferred to sell out their shares to a bigger and more experienced company which they believed could withstand the situation. Above all, selling was for them a better option to recover their investment.

Concerning supply chain issues, since the growth of a company is mainly based on a good supply chain management that is coordinating the various activities from the production to the delivery of goods and services to the end customers, the M&A activity may face challenges as to ensuring the active streamlining of the business activity, continuity and operational success.
It is well known that investors prefer business friendly environments. After an acquisition, an investor has no power to prevent the government from reshuffling or making adjustments that will affect the business environment. This political uncertainty generally results in a slow pace in new investments and reluctance from potential foreign investors.

Every business could be risky depending on the internal or external factors that could threaten its operation and affects its profits. It is therefore important to address certain risks before the M&A activity. This explains why a painstaking process of due diligence is always required with the best practices.

Recently, the energy sector – especially oil and gas – has been among the most active sectors in the M&A activity. The increase in demand and gas prices has led to the increase in energy prices. This situation inevitably affects the sector and justifies M&A activities in the oil and gas sector. The operator surely believes that by merging companies or acquiring a company they could better tackle the issues of the energy sector.

Currently, several sectors are experiencing a good level of deal activities. We can mention among others: the banking and financial sector, technology and telecommunication, the oil and gas sector, the insurance sector, the industrial sector, just to mention a few. In our opinion, what would explain this multitude of transactions is the present Cameroonian business environment, which is currently undergoing a great phase of modernisation.

Indeed, the market players are getting closer to international standards in order to be more competitive in the global market, which will in turn attract multinationals interests in our market and the desire to invest in our country. Moreover, the government is trying to put in place the most prolific incentives to attract the maximum number of investors.

In recent times, we have worked with both large firms and SMEs but mostly large firms. The reason why we have mostly worked with large firms is that most of our clients are foreign entities wishing to invest in our region or acquire undertakings in our region. Those involved in such operations are generally foreign large firms who also contact foreign law firms who then refer to a locally based international law firm like ours.

In addition, the fact that we are a business law firm dedicated to Africa and providing customised, innovative and accessible legal and tax services to local and international companies, banks, financial institutions, governments and other public sector entities, as well as individual investors and start-ups explains why we are predisposed to work with large firms.

Moreover, our practice focuses on project financing, private equity, corporate law and mergers and acquisitions, banking and finance, insurance and others. We assist all stakeholders interested in financing operations like banks and development finance institutions. In the same vein, we work with venture capital funds in their investments in young and innovative start-ups, particularly in new technology sectors. We equally accompany public entities and governments of African States in the implementation of projects in the infrastructure, telecommunication, mining and energy sectors, oil and gas both in Cameroon and in the sub region.

Looking at SMEs, we accompany them with company registration to day-to-day corporate activities (organising board meetings, shareholder meetings, approval of financial statements, appointment of directors, etc.). We also advise them with their company restructuring and administration. We generally provide corporate governance advice to SME’s.

We advise entrepreneurs on how to go about their various procedures and provide them with the laws and regulations that govern their sector so as to ensure that their business operations are secured.

We tell them the importance of analysing their environment and the competition in order to better manage the challenges of the market.

We also assist them with the drafting of their legal documents and contracts so as to secure the long term engagements that tie them.

We also anticipate their needs and the other possibilities that arise from them.

We ensure an informed global advisory scope for our clients who are based overseas or have operations in other jurisdictions by frequently communicating through reviews, articles, newsletters on topics which are likely to interest them. We equally publish up to date legislations in their sectors to keep them aware of the advancement of the legal framework in their domain. In addition, we are members of international associations where we are in touch and exposed to the foreign practice.

Furthermore, we organise and equally take part in trainings, and we are often invited as speakers in international conferences in and out of the region.

There is a new piece of legislation in the corporate financing field. Since January 1, 2023, the Regulation No 04/22/CEMAC/UMAC/COBAC on conditions and control of Islamic finance activity in the CEMAC has entered into force. This became part of Cameroon legislation as a Member State of CEMAC and the potential companies have started to use this financing approach in a well-established legal framework. There are also new trends in the Alternative Disputes Resolution environment. Business owners refer more to arbitration and ADR due to the fact that they are practical for time management in business activity.

Our business environment is growing and becoming very dynamic, which is why we have a team of experts in the most demanding areas of law and saw the importance of taking up training in niche sectors. Moreover, we do our best to stand out and be meticulous in the practice in order to fit in the global market. With our dynamic team, we are able to forge a reputation that speaks for itself and build trust with our clients.

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International Corporate / M&A - Cameroon

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