DECISION: ACQUISITION OF BAOBAB S.A.S BY BELTONE CAPITAL

Published On - June 6, 2025

Registry ERCA Compendium of Decisions

DECISION EC/D.05/05/25 OF THE COUNCIL OF THE REGIONAL COMPETITION AUTHORITY OF ECOWAS REGARDING THE ACQUISITION OF BAOBAB S.A.S BY BELTONE CAPITAL

The Council of the Regional Competition Authority of ECOWAS,

MINDFUL of Supplementary Act A/SA.1/12/08 adopting of Community Competition Rules and the modalities of their application within ECOWAS;

MINDFUL of Supplementary Act A/SA.2/12/08 on the establishment, functions and operation of the ECOWAS Regional Competition Authority (ERCA);

MINDFUL of Supplementary Act A/SA.3/12/21 amending Supplementary Act A/SA.2/12/08 on the establishment, powers and functioning of ERCA;

MINDFUL of Regulation C/REG.21/12/21 on the powers and composition of the Council of ERCA;

MINDFUL of Regulation C/REG.23/12/21 on the rules of procedure for mergers and acquisitions in ECOWAS;

MINDFUL of Regulation C/REG.24/12/21 on ERCA’s rules of procedure in competition matters;

MINDFUL of Enabling Rule PC/REX.1/01/24 on the Procedural Manuals of ERCA relating to its Council, in its Article 12 (3.d);

MINDFUL of the notification letter from by Beltone Capital and Baobab S.A.S dated 24 mars 2025 and the supporting documents registered under number 1224;

HAVING HEARD the Secretary of the Council during its session of 27 May 2025 on the facts, the procedures and the findings of the proposed acquisition;

CONSIDERING THE FOLLOWING:

I. FACTS AND PROCEDURE

I.1 The notification

  1. By letter dated 24 March 2025 and supporting documents registered under number 1224, ERCA was notified by Beltone Capital of its intended acquisition of Baobab S.A.S.
  2. In accordance with Article 2 (1.d) of Regulation C/REG.23/12/21 and subsequent texts, the notification of the acquisition was published in the Official Journal of the Community (Volume 3, April 2025), on the websites of ERCA and the ECOWAS Commission, and in the relevant Member States (24 April 2025).

I.2. The Acquisition Operation

  1. The transaction notified to ERCA concerns the acquisition of 68.11%, potentially up to 100%, of the share capital of Baobab S.A.S. by Beltone Capital, a subsidiary of an Egyptian group, Beltone Holding SAE, which operates in the financial services sector. Baobab is active in the microfinance sector in several ECOWAS member states (Senegal, Côte d’Ivoire, Nigeria), giving the transaction a regional dimension subject to Regulation C/REG.23/12/21.
  2. The acquisition is intended to allow Beltone to enter West African markets by relying on Baobab’s local presence, without any immediate or direct change in the market structure.

II. ANALYSIS OF THE IMPACT OF THE TRANSACTION ON THE MARKET

II.1 Overview of Market Structure

  1. The microfinance markets in the countries concerned are fragmented, with a range of players (Microfinance Institutions, fintechs, banks). No single player holds a market share above 20%, and the Herfindahl-Hirschman indices confirm a low to moderate level of concentration.

II.2 Information on Regional Activity

  1. The services offered include MSME loans, savings, money transfers, and some insurance products, with an increasing cross-border reach through digital channels.

II.3 Market Share

  1. Available information on the market shares reflects a significant, but not dominant, market presence of BaobabA.S in Côte d’Ivoire, Senegal and Nigeria.

II.4 Main Competitors

  1. Players such as Cofina, Advans, UCCMS, LAPO, and Accion are present depending on the country, with none holding a dominant position alone. Competition remains active, with many recent digital entrants.

II.5 Sector Regulation

  1. Regulation is ensured at the national level (CBN in Nigeria, BCEAO in the UEMOA), but ERCA holds regional jurisdiction over cross-border mergers. The sector is tightly regulated (prudential ratios, anti-money laundering measures, etc.).

II.6 Definition of the Relevant Market

a. Product Market

10. The transaction concerns the microfinance sector, targeting MSMEs and populations excluded from the traditional banking system. The services offered by Baobab and those provided by Beltone are neither substitutable nor in direct competition. Beltone operates in private equity, asset management, and institutional finance.

b. Geographic Market

11. The relevant market is national, as Baobab has local subsidiaries. Beltone, on the other hand, had no direct operations in the ECOWAS region prior to the transaction.

III. CONCLUSION

III.1 Legal Analysis

a. Applicable Legal Framework

12. The legal framework for the control of business mergers and acquisitions within ECOWAS is based on two fundamental texts:

  • Supplementary Act A/SA.1/12/08 of 19 December 2008, on Community Competition Rules;
  • Regulation C/REG.23/12/21 of 10 December 2021, on mergers and acquisitions within ECOWAS.
  1. Moreover, the evaluation follows the modalities set out in implementing instruments, particularly the Implementing Regulation PC/REX.1/01/24 and the Guidelines on mergers and acquisitions.
  2. According to the above provisions, ERCA is competent to examine any merger or acquisition that:
  • is likely to have anti-competitive effects in one or more Member States;
  • may affect trade or investment between ECOWAS Member States;
  • involves companies operating in more than one country within the common market.
  1. These provisions aim to prevent any merger or acquisition from hindering, restricting or distorting competition within the common market, or harming intra-community trade and consumer welfare.
b. Admissibility of the Notification

16. The parties’ notification of the acquisition was reviewed in accordance with established legal criteria. The following conditions were met:

  • The companies involved (Beltone Capital and Baobab S.A.S) operate in at least two ECOWAS Member States;
  • Their combined turnover within the common market exceeds 20 million Units of Account (UA).
  1. These conditions being met, ERCA is justified in reviewing the transaction.

III.2. Competitive Market Situation

  1. The analysis concludes that there are no significant restrictions on competition:
  • No reduction in the number of market participants;
  • No direct overlap in activities;
  • Positive potential in terms of innovation, digitalisation, and financial inclusion.
  1. However, some indirect risks have been identified: potential future coordination between subsidiaries, cross-ownership concentration, or a loss of diversity in the range of services offered. Post-acquisition monitoring is recommended, in particular to:
  • Ensure the autonomous governance of Baobab;
  • Preserve the social mission of microfinance;
  • Avoid any future anti-competitive consolidation.
  1. THEREFORE, the Council endorses the evaluation by ERCA Executive Directorate, which demonstrates that the transaction is not likely to hinder competition or adversely affect consumer welfare in the relevant product or geographic markets, and

 DECIDES

Article 1 – Approval

The acquisition of Baobab S.A.S by Beltone Capital is approved unconditionally.

Article 2 – Integration into Regional Market Dynamics

The new entity resulting from the acquisition must align with market dynamics and adapt its offerings to meet the specific needs of consumers in ECOWAS Member States.

Article 3 – Post-Transaction Monitoring

The Executive Directorate of ERCA is tasked with post-transaction monitoring to ensure that the commercial strategy of the new entity resulting from the acquisition remains in line with the principles of free competition within the region.

Article 4 – Entry into Force, Notification and Publication

This Decision enters into force on the date of its signature. It shall be notified to the parties and published in the Official Journal of the Community.

 

Done in Abidjan, this day of 27 May 2025.

 

FOR THE ERCA COUNCIL

  

Dr. Juliette TWUMASI-ANOKYE

THE CHAIRPERSON