Saudi Arabia enforces a mandatory and suspensory merger control regime that applies across the entire economy. The regulations are found in the Competition Law and its Executive Regulations, both of which took effect on September 30, 2019. The Saudi General Authority for Competition (GAC) oversees the system, which requires parties to file notifications where the criteria are met and to halt deals until the authority clears the transaction or the review period expires.
Scope and Jurisdiction
The GAC investigates and decides on mergers, and it enforces the regime through administrative penalties like fines. For criminal sanctions against individuals, the authority must petition the public prosecution. The GAC is an independent agency, and there are no alternative merger control regimes for specific sectors. While there have been efforts to establish a competition framework for the Special Economic Zone NEOM, that regime is not active and has no announced timeline.
Supranational frameworks do not exist in the Gulf region, and Saudi Arabia is not a member of any such framework. The GAC cooperates with the Ministry of Commerce and the Saudi Zakat, Tax, and Customs Authority to identify changes of control involving Saudi entities. This cooperation is effective for direct share transfers but misses indirect acquisitions. The legislator addressed this gap by providing for cooperation with the Registrar of Ultimate Beneficial Owners, maintained by the Ministry of Investment. However, that register is not set up yet.
Cooperation Abroad
Information sharing with foreign competition authorities is limited. The GAC has signed memoranda of understanding with Kuwait and Iraq to exchange information, but there is no evidence of active cooperation on ongoing reviews. The agency is a member of the Arab Competition Network, which has discussed a joint database but has not established one. Outside the MENA region, cooperation is rare, limited to cases where remedies were discussed and the parties consented to such outreach.
Defining Control and Change of Control
The GAC’s 5th Edition of the Merger Guidelines, published in April 2025, clarifies the definition of control as the ability to block or impose decisions on strategic matters. A change of control occurs if an acquirer obtains sole or joint control, or if control changes from joint to sole. Veto rights over business strategy or management typically confer control, whereas veto rights over minor investment decisions usually do not. The guidelines also establish special treatment for investment funds, which may not trigger a filing if control rights are used solely to protect the investment.
Joint ventures are subject to merger control regardless of whether they are equity or unincorporated, and greenfield ventures are included. The GAC applies a stricter approach than the European Commission to full-function joint ventures. Non-full function ventures do not require notification, but potential sales to third parties—intended or actual—can deem a joint venture full function. Consequently, if parties alter a non-full function venture to make it full function, a filing is required.
Thresholds and Filings
Linked or successive transaction steps may be treated as a single filing if they are legally linked. However, clearance decisions expire after 12 months, potentially requiring a new filing if steps take longer. Different, interrelated transactions like asset swaps are reviewed as a single full transaction, while inter-conditional transactions are separate unless strict contractual provisions bind them.
The notification thresholds were amended by the latest Guidelines. For acquisitions, the Saudi turnover requirement can no longer be met by the acquirer alone; the target must contribute some portion of its Saudi turnover. Acquisitions below the threshold still require filing if they affect Saudi Arabia. For mergers and joint ventures, the minimum worldwide target turnover of SAR 40 million does not apply, and overlap is not required to trigger a filing. The GAC will aggregate all relevant parties’ turnover, regardless of market relevance.
Calculating Turnover
The GAC considers the annual turnover of relevant parties, using the fiscal year if defined or the calendar year otherwise. For banks and financial institutions, turnover is the sum of income items after deducting VAT and related taxes. Insurance providers use the value of gross premiums written. If financial statements are in a foreign currency, they must be converted to Saudi Riyals using the average annual exchange rate of the relevant fiscal year.
Turnover is allocated to the location of the customer. State-owned entities are exempt only if their activities serve purely public purposes; commercial activities require notification. The GAC may grant exemptions for beneficial effects on quality, diversification, or innovation, though this is difficult to obtain. Additionally, the 5th Edition introduced an exemption for joint ventures in Saudi Arabia with foreign and Saudi participation under specific conditions.