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- Merger Screening
1. What type of transactions are caught by the merger control regime?
1.1.1 Type of transactions that are caught by the merger control rules?
Mergers and acquisitions that result in the acquisition of direct or indirect control through total or partial transfer of ownership or benefit in assets, equity, shares or obligations from one entity to another.
2. Establishing jurisdiction for notification of mergers
2.3 General thresholds
Prior merger clearance is required if:
- The combined market share of the undertakings concerned is at least 40% in the relevant market in the United Arab Emirates, and the proposed transaction may affect competition in the relevant market, particularly by creating or enhancing a dominant position.
The merger control regime in the United Arab Emirates is relatively new and it is not yet clear whether an increment in market share is required to meet the thresholds or whether the threshold may be met by one undertaking singlehandedly. Neither is it clear whether the threshold applies if the undertakings concerned have no competitive overlap.
The exact definition of the meaning of “may affect competition” is also not yet clear.
2.4 Other national thresholds for ex ante merger control (e.g. sector-specific rules)
The following sectors have sector-specific requirements:
- Financial services;
- Oil and gas;
- Pharmaceutical production and distribution;
- Cultural activities;
- Postal services including express delivery;
- Land, sea, air and rail transport;
- Water production and distribution;
- Sewage and waste disposal.
Generally, foreign ownership of companies incorporated in the United Arab Emirates (UAE) is limited to 49%. Hence, UAE incorporated companies must have a minimum of 51% ownership by UAE nationals. In certain sectors, further restrictions on foreign ownership apply, which reduce further the permitted level of foreign ownership. However, this may not always apply to investors who are nationals of members states to the Gulf Cooperation Council.
Aside from these shareholding restrictions, there is no separate approvals process for foreign investment in the UAE.
2.5 Foreign-to-foreign mergers
2.5.1 Do any exemptions, special thresholds etc. apply to foreign-to-foreign mergers, i.e. where none of the undertakings concerned is domiciled in the jurisdiction?
Foreign-to-foreign mergers are caught by the merger control regime if the jurisdictional thresholds are met, regardless of the location or nationality of the undertakings concerned.
However, foreign-to-foreign mergers must meet the local effects test, i.e. the undertakings concerned must operate in a United Arab Emirates market or engage in activities abroad that have harmful effect on competition in the United Arab Emirates.
and last updated on 18-03-2020 by
Legal Cross Border has itself provided all input about merger control in the United Arab Emirates. This information has been gathered and validated by our in-house lawyers to guarantee the highest quality outcome. This said, we are currently looking for a local partner to cover Merger Control UAE - please contact us if you would like to be our new partner.