Saudi Arabia Merger Control Update: Maximum fee payable for the review of economic concentration applications reduced

On 17 May 2023, the Board of the Kingdom of Saudi Arabia’s (KSA) General Authority for Competition (GAC) approved a decision to reduce the maximum fee payable for the examination of economic concentration applications.

The reduced fees shall be 0.0002 per cent of the total annual sales of all undertakings participating in the transaction, with a cap of SAR 250,000 (circa USD 66,700), a reduction of SAR 150,000 (circa USD 40,000) from the previous cap of SAR 400,000 (circa USD 106,700).

GAC explained that its decision to reduce the maximum fee payable was made following a periodic review which considered international best practices and aspects relating to the variables of the national economy and to reduce the financial burdens for entities involved in the transactions.

The KSA Competition Law defines an economic concentration as any act that results in the total or partial transfer of ownership of assets, rights, equity, shares, or obligations of an entity to another, or the joining of two or more administrations in a joint administration or any other form that leads to the control of an entity or entities including influencing its decision, the organisation of its administrative structure, or its voting system.

Entities seeking to participate in an “economic concentration” are required to notify GAC at least 90 days before completion of the transaction if:

• the combined global turnover of the entities party to the economic concentration transaction exceeds SAR 200 million (there is no minimum local turnover threshold);
• the transaction has nexus to a Saudi market; and 
• there is an acquisition or change in control as a result of the transaction. 

Transactions such as mergers and acquisitions (M&A), takeovers, joint ventures (JVs), and any other transaction that meets the above conditions are likely to be caught by the KSA Competition Law.

This above-mentioned change comes following GAC’s decision earlier this year to increase the threshold of the minimum annual sales requirement on which an economic concentration is notifiable to GAC from SAR 100 million (circa USD 26 million) to SAR 200 million (circa USD 52 million). For more information, please access our previous note on the "Threshold for economic concentration reporting increased".

The recent changes made to the maximum filing fee and the thresholds for the purposes of making an economic concentration filing with GAC will facilitate ease of doing business in KSA as well as strengthen KSA’s reputation as an attractive market for investment.

Our corporate team in Riyadh has assisted a number of international and local clients on KSA Competition Law matters, including filing economic concentration applications to GAC. If you would like further information on any of the matters referred to in this article, please contact us.