TerraLex Cross-Border Guide to Pre-Merger Notification Guide

As of February 2025, there is currently no mandatory merger notification regime in Malaysia. However, the Malaysia Competition Commission, (“MyCC”), the competition law enforcement authority in Malaysia, has begun the process of amending the Competition Act 2010 (“CA 2010”) to introduce a general merger control regime. On 25th April 2022, MyCC published a consultation paper of the proposed amendments to the CA 2010 (“Proposed Amendments”).

The Proposed Amendments seek to introduce a mandatory pre-notification which will be required for anticipated mergers that exceed the prescribed threshold. Nevertheless, at present, the CA 2010 still lacks specific provisions addressing merger control and a mandatory notification regime.

Currently, mergers and acquisitions ("M&As") are regulated in Malaysia only in the aviation and telecommunications sectors. M&As in these industries are regulated through sector-specific commissions, namely the Malaysian Aviation Commission (“MAVCOM”) and the Malaysian Communications and Multimedia Commission (“MCMC”).

The Proposed Amendments seek to introduce a voluntary pre-merger notification mechanism. Separately, there are sector-specific voluntary merger notification mechanisms in place in respect of the aviation and communications and multimedia sectors. These mechanisms are provided for under the Malaysian Aviation Commission Act 2015 and the Guidelines on Mergers and Acquisitions issued pursuant to the Communications and Multimedia Act 1998 respectively. Under this voluntary notification regime, parties within the relevant industries assess their transactions and decide whether to notify the relevant industry regulators.

The main advantages of the voluntary merger notification mechanism is that it allows relevant industry players to self-regulate by conducting an internal assessment on whether their merger or proposed merger will infringe upon competition laws, thereby reducing the risk of possible future legal challenges or investigations by the relevant regulators. If a merger is not notified, it may still be subject to post-completion scrutiny, particularly if it raises competition concerns. Voluntary notification helps identify and resolve potential issues in advance.

As of 2025, Malaysia is still in the process of implementing a mandatory notification regime. Whilst the specific criteria and thresholds for mandatory notification (e.g., based on factors such as market share or turnover) are yet to be finalised, the types of transactions likely to be caught under the Proposed Amendments are any merger or anticipated merger that would result in a substantial lessening of competition in any market for goods or services. The types of mergers caught are likely to take the following forms:

• merger of two or more previously independent enterprises into one single enterprise;
• acquisition of direct or indirect control of the whole or part of one or more enterprises;
• acquisition of assets of one enterprise by another enterprise which 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
• creation of a joint venture to perform, on a lasting basis, all the functions of an autonomous economic entity.

The applicable threshold is not yet announced and will be prescribed by an order published in the Gazette after the final amendments to the CA 2010 have been passed by Parliament.

Joint ventures (if consummated) which may result in a substantial lessening of competition within any market for goods or services, come under the purview of the Proposed Amendments.

Aviation Services Sector: UnderEssentially, mandatory and voluntary notification apply to mergers or anticipated mergers transacted within or outside of Malaysia which may result in a substantial lessening of competition within any Malaysian market for goods or services.

Separately, under the MACA 2015, a voluntary notification applies to any merger which results or may be expected to result in a substantial lessening of competition within aviation services in Malaysia, notwithstanding the same has been transacted or executed outside Malaysia.

Communication and Multimedia Sector: Meanwhile, under the CMA 1998, voluntary notification may be given by any licensee under the CMA 1998, within or beyond the geographical limits of Malaysia. In order to become a licensee under the CMA 1998, it is a typical prerequisite for licensees to incorporate a Malaysian company.

Information Details of the information required for the merger notification to MyCC will be clarified by MyCC subsequently.

For merger notification to MAVCOM, the following information is required:

• Details of parties to the merger including shareholding and organisational structure.
• Information on the merger.
• Description of the relevant aviation service market.
• Description of potential anti-competitive effects of the merger.
• Description of significant economic efficiencies.
• Description of significant social benefits.

As for MCMC, the information required for notification and assessment of a merger includes:

• Information about the background of the parties, transaction, reporting obligation with other authorities, relevant communication market involved, market share and dominant position of the parties.
• Details of industry, competitors, suppliers, and customers.
• Information on countervailing buyer power.
• Details of barriers to entry.
• Details of what competition in the market would look like without the merger taking place.
• Description of vertical effects of the transaction.
• The failing firm in the merger (if relevant) and the justification and evidence on why the merger should be allowed to proceed.
• Details of beneficial effects of the transaction on competition.
• Details of structure of supply and demand in the relevant markets.
• Description of importance and nature of research and development in the relevant markets.
• Details of the cooperative agreements in the relevant markets.
• Description of changes to the market as a result of the transaction.
• Description of efficiency gains generated.

Duration

The time taken for compilation of information varies from case to case depending on the extent of disclosure made by the parties and availability of such information.

Not applicable.

No, MyCC has yet to prescribe what the notification fees will be. Separately, no fees are charged for the merger notification under both the MACA 2015 to MAVCOM and CMA 1998 to MCMC.

There is no specific deadline for notification application for both notifications under the MACA 2015 and CMA 1998. MyCC has not prescribed a specific deadline for merger notification in the Proposed Amendments. We expect more detailed procedures to be issued by MyCC in future.

As for merger notification to MAVCOM and MCMC, no specific deadline is provided.

The proposed merger control regime is suspensory in nature meaning any anticipated mergers which are notified to MyCC cannot be implemented before MyCC’s clearance i.e., parties to the anticipated mergers are subject to standstill obligations. Parties to a merger would therefore be prohibited from implementing all or any part of their merger transaction or co-ordinating their competitive behaviour before MyCC’s clearance of their merger transaction.

Per the Proposed Amendments, MyCC is required to issue its decision on the anticipated merger that was mandatory to be notified to it within 120 working days from the date when MyCC accepts the notification as being complete. These 120 working days consist of a Phase 1 review period of 40 working days and Phase 2 review period of 80 working days (if Phase 2 review is required). In the event that MyCC has not made any decision with regard to the anticipated merger that was notified to it upon the expiry of the 120 working days review period, the anticipated merger shall be deemed to be approved and the parties to the anticipated merger may proceed to consummate the merger. MyCC may, however, stop the clock in computing the 120 working day-period in the following circumstances:

• when MyCC requests further information from the relevant parties;
• when the party seeks an extension of time to file for its written representation;
• when the party wants to make an oral representation; or
• when the party submits a commitment offer.

Notifications that are made voluntarily to MyCC in respect of transactions that do not meet the prescribed threshold will not be subject to the 120 working days review period. We expect the procedures for voluntary notifications to be issued by MyCC in February 2023, followed by guidelines to be issued in July 2023.

For a voluntary notification to MCMC, the indicative timeline for completion of assessment process is within 30 business days from the date of MCMC’s notification of receipt of valid application form for Phase 1 assessment and within 120 business days from the date of commencement for Phase 2 assessment.

Per the Proposed Amendments, parties are not allowed to consummate the transaction prior to receiving the necessary approvals from MyCC. Violation of the requirement not to consummate an anticipated merger prior to MyCC’s approval and failure to notify MyCC of the anticipated merger which meets the prescribed threshold may attract MyCC’s investigation and could potentially result in a financial penalty of up to 10% of the value of the transaction.

For a voluntary notification to MAVCOM, a merger party that fails to notify MAVCOM of a merger or anticipated merger and a failure to apply for a decision by MAVCOM carries the risks of being investigated by MAVCOM if such merger raises competition concerns under the MACA 2015. MAVCOM may initiate an investigation under section 83 of the Act where there is reason to suspect that an anticipated merger or a merger would infringe the prohibition under section 54 of the MACA 2015. If MAVCOM finds that an anticipated merger or a merger infringes the prohibition under section 54 of the Act, it shall require that the infringement to be ceased immediately, which may entail the modification or dissolution of the anticipated merger or merger. MAVCOM may also give any direction as provided under section 59(1)(b) to (d) of the MACA 2015.

As for a merger that has already been completed, the notification and application to MAVCOM may be made at any time. Due to the voluntary nature of the notification and application regime under the Act, merger parties may decide to complete an anticipated merger while an application is being assessed by MAVCOM. In such a situation, MAVCOM may accept the application which was previously submitted and make a decision accordingly or refuse to make a decision in respect of such application and require the merger party to make a new application for the merger.

Similar to aviation services sector, parties proceeding with a merger without submitting the transaction for MCMC’s assessment bear the risk of being investigated by MCMC if such merger raises competition concerns under the CMA 1998.

Administrative actions available to the MCMC under the CMA 1998 include the following:

• Section 142 – Seeking interim or interlocutory injunction against the merger.
• Section 139 – Directing licensee in a dominant position to cease the merger and to implement appropriate remedy.
• Section 37 – Recommending to the Ministry of Communications and Multimedia to suspend or cancel an individual licence where the licensee fails to comply with a provision of the CMA 1998.

Additionally, MCMC also seek to enforce Section 143 of the CMA 1998, namely financial penalty of up to RM500,000 or imprisonment for up to 5 years, or to both. The offender may further be liable to a fine of RM1,000 for every day or part of a day during which the offence continues after conviction.

Not applicable.

Not applicable.

MyCC: MyCC is an independent body established under the Competition Commission Act 2010 to enforce the CA 2010. Its main role is to protect the competitive process for the benefit of businesses, consumers, and the economy. The Competition Commission Act 2010 empowers MyCC to carry out functions, such as to implement and enforce the provisions of the CA 2010, issue guidelines in relation to the implementation and enforcement of the competition laws, act as an advocate for competition matters; carry out general studies in relation to issues connected with competition in the Malaysian economy or particular sectors of the Malaysian economy, inform and educate the public regarding the ways in which competition may benefit consumers and the economy of Malaysia. The Proposed Amendments to the existing powers of MyCC under the CA 2010 generally seek to further widen and strengthen MyCC’s powers.

MAVCOM: MAVCOM is an independent body set up under the MACA 2015 to regulate economic and commercial matters relating to civil aviation. MAVCOM has the power to take interim measures upon having reasonable ground to believe that the merger or anticipated merger has infringed or is likely to infringe relevant provisions, which may include requiring or causing any person to suspend the effect of, and desist from acting in accordance with, any agreement which is suspected of infringing the merger prohibition. Moreover, upon a determination by MAVCOM that an anticipated merger or merger infringes the merger provisions under the MACA 2015, MAVCOM may require the merger to be dissolved or modified, and impose financial penalties to the merger parties. MAVCOM has the option to bring proceedings before the Malaysian High Court against any person who fails to comply with its direction.

MCMC: MCMC is a regulatory body established under the Malaysian Communications and Multimedia Commission Act 1998 to supervise and regulate the communications and multimedia activities in Malaysia. MCMC has investigative powers over any merger involving the communication and multimedia industry regardless of whether the relevant parties have sought MCMC’s assessment. MCMC may seek interim or interlocutory injunction if it decides that the parties have engaged in anticompetitive conduct under section 142 of the CMA 1998. Moreover, MCMC may direct a licensee under section 51 of the CMA 1998 to cease such conduct if contravention of section 133 of the CMA 1998 is a breach of licence condition. Under section 139 of the CMA 1998, MCMC may also direct a licensee in a dominant position to cease a conduct which has or may have the effect of substantially lessening competition. Pursuant to section 37 of the CMA 1998, MCMC may recommend to the Ministry of Communications and Multimedia to suspend or cancel an individual license where the licensee fails to comply with the provision of the CMA 1998. Additionally, MCMC also seek to enforce section 143 of the CMA 1998, namely financial penalty of up to RM500,000 or imprisonment for up to 5 years, or to both. The offender may further be liable to a fine of RM1,000 for every day or part of a day during which the offence continues after conviction.

Aviation Services Sector: Under the CA 2010, any person who discloses or makes use of any confidential information with respect to a particular party or the affairs of an individual commits an offence. Additionally, per the Proposed Amendments, the confidentiality provision is enhanced to provide for the obligation of a person who is the recipient of the confidential information to preserve the confidentiality of the information that has been received. Failure to preserve confidentiality of the information that has been disclosed amounts to an offence.

For voluntary merger notifications to MAVCOM, parties are required to identify and mark all confidential information provided to MAVCOM such as trade, business or industrial information that has economic value and is not generally available or known to others. A non-confidential version of the documents, with the confidential information removed is also required to be submitted to MAVCOM. MAVCOM will also allow parties to a voluntary merger notification to review MAVCOM’s decision prior to the same being published in order to determine whether there is any confidential information contained in MAVCOM’s decision.

Communication and Multimedia Sector: Similar to aviation services sector, public version of the documents with commercially sensitive or confidential information redacted and marked are also required to be submitted to MCMC in addition to the original versions. The public versions will be used in consultations with third party while the original versions will only be used by MCMC for its internal purposes. In respect of transaction which has not been publicly announced, parties may seek MCMC’s limited confidential assessment. This is an informal assessment without any third-party consultation. No announcement will be made by MCMC of its final decision and that it is conducting an assessment. However, any view taken by MCMC is non-binding and subject to full assessment of the transaction once it has been publicly announced.

Per the Proposed Amendments, generally, mergers or anticipated mergers, if consummated, that may result in a substantial lessening of competition in any market for goods or services are likely to face challenge.

There is no general guidance as to when mergers are likely to face challenge under both the MACA 2015 and CMA 1998. For the aviation services sector, mergers and anticipated mergers are likely to be investigated by MAVCOM if the combined turnover of the merger parties in Malaysia in the financial year preceding the transaction is at least RM50 million or the combined worldwide turnover of the merger parties in the financial year preceding the transaction of the merger parties is at least RM500 million.

Communication and Multimedia Sector: AsFor communication and multimedia sector, as a general guidance, mergers are likely to be investigated if:

• in a proposed merger, one of the parties is a licensee in a dominant position or in respect of horizontal mergers, the mergers would result in the merged entity obtaining a dominant position with a market share of 40% or more post- mergers;
• for completed mergers, the merged entity is a licensee in a dominant position;
• if one or both parties to the merger is a licensee who is subject to an ongoing investigation by the MCMC in respect of any conduct that is prohibited under the CMA 1998; or
• if there is significant cross shareholding between the parties to the merger of 40% or more.

Businesses and their advisers (including lawyers and investment bankers) will need to ensure that their M&A transactions are afforded proper competition analysis so as to be in compliance with the CA 2010 once the Proposed Amendments are in force.

Merger parties shall first carry out their own assessment on whether an application to MAVCOM and MCMC is appropriate for their merger situation and may wish to seek legal advice if necessary. Generally, notification of merger situation should be made if the merger parties believe the merger may result in a substantial lessening of competition within their markets. Merger parties may direct any enquiries on matter relating to Part VII (Competition) of the MACA 2015 to [email protected] and Chapter 2 of Part VI (Economic Regulation) of the CMA 1998 to [email protected].

Apart from the above, any mergers and take-overs in Malaysia for listed corporations or public companies and any other entities as may be specified by the Securities Commission Malaysia are subject to Division 2 of Part VI of Capital Markets and Services Act, 2007, Malaysian Code on Take-Overs and Mergers, 2016 and Rules on Take-Overs, Mergers and Compulsory Acquisitions.