New Merger Control Thresholds in the United Arab Emirates

What has changed?

The Decision introduces a new “turnover” based threshold (the “Turnover Threshold”) for merger control filings in the UAE which is triggered by a transaction involving an “Economic Concentration” where the total annual sales value of the relevant parties in the Relevant Market in the UAE exceeds three hundred million dirhams (AED 300,000,000) during the previous financial year.

This new Turnover Threshold is in addition to the pre-existing “market share” threshold (“Market Share Threshold”) whereby a filing must be made where the total market share of the parties to the “Economic Concentration” exceeds forty percent (40%) of the total transactions in the Relevant Market within the UAE during the previous Fiscal Year.
Pursuant to the Decision, a merger control filing is required to be made where either the Turnover Threshold or Market Share Threshold is satisfied. This is a mandatory and suspensory filing regime.

The “Economic Concentration” parties under the UAE Competition Law on a 100% sale transaction are the target company and the buyer (and would also capture the seller(s) in the case of a minority or majority stake sale).

“Relevant Markets” are defined either by (i) product area, being goods or services which are regarded, by reason of their prices, characteristics and intended use, as interchangeable or substitutable in terms of meeting a certain need of consumers; or (ii) relevant geographic area, being a physical or digital place where the supply and demand of a product or service converge and where the conditions of competition are similar or homogenous.

What does it mean for M&A transactions in the UAE?

Merger control filings have not traditionally been a factor in UAE M&A transactions owing to the relative difficulty of satisfying the Market Share Threshold, as well as exclusions relating to Federal and Emirate-level government owned entities. 

However, with the new Turnover Threshold, it is likely that merger control filings may become much more frequent within the UAE, especially where strategic players are acquiring targets in the same sector, or where any target with significant sales is being acquired.  Further implementing regulations are expected over the coming months which should provide investors with further clarity on the overall merger control regime. 

Unlike other regional merger control regimes (for example Saudi Arabia) the UAE merger control regime does not appear to have extra territorial reach, and the Turnover Threshold is focused solely on UAE sales. So, for example, a UAE company with sales over AED 300,000,000 acquiring a foreign company with sales outside of the UAE would not trigger a filing (as there would be no change to the control of any parties in the UAE).

The new thresholds in the Decision are effective from 31 March 2025. Where a filing is triggered, a notification to the Ministry of Economy must be made at least 90 days prior to consummation of the transaction. Investors in the UAE will need to give early consideration to a merger control filing and its associated impact on transaction timetables – with the gap between signing and closing likely to increase considerably where a filing is triggered.

Fines for non-notification of a transaction may be up 10% of the annual revenues from the relevant product or service in the UAE for the previous financial year. If the annual relevant revenues are not able to be calculated, a fine of between AED 500,000 to 5,000,000 may be imposed.