Saudi Competition Law
The Competition Law issued by Royal Decree No. (M/75) dated 1440/06/29H and its regulations, govern economic concentration, in addition to other directly related operations closely linked to the safety and stability of competition within the Kingdom or outside it when it adversely affects competition within the Kingdom. The Competition Law defines economic concentration as: "Any act resulting in the complete or partial transfer of ownership of assets, rights, shares, interests, or obligations from one entity to another, or the merger of two or more managements in a joint management, in accordance with the criteria and standards determined by the regulations."
The provisions of the system apply to economic operators, whether natural or juristic persons, except that public institutions and companies fully owned by the state are exempt from the application of the provisions of the system when any of them is exclusively authorized by an official exception instrument to offer a commodity in a specific field. The official exception instrument refers to a royal decree, royal order, decision of the Council of Ministers, or royal decree."
Definition of Economic Concentration and Participation Conditions
The Competition Law and it's Regulations addresses the term "economic concentration," which refers to any transaction involving ownership transfer of assets, shares, interests, or obligations from one entity to another, whether partially or completely. It encompasses mergers, acquisitions, and ownership combinations, as well as the joint administration of two or more entities. It also includes any action that results in controlling one or more entities, either through influencing their decisions, appointing their management, or determining their voting mechanisms.
However, entities wishing to engage in economic concentration are required to apply for approval to the General Authority for Competition when the total annual sales value of all entities involved in the economic concentration exceeds SAR 200,000,000 (two hundred million Saudi Riyals). They must submit the application at least 90 days prior to completing the economic concentration. During this process, they must comply with providing the necessary documents, completing the required forms, and paying the applicable fees.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
