If you’re a company that has, is or will be dealing with merger and acquisitions transactions, then there are significant developments in the UAE's regulatory landscape that may impact your business operations. On December 29, 2023, Federal Decree-Law No. 36 of 2023 on the Regulation of Competition (the New Law) was issued, replacing Federal Decree-Law No. 4 of 2012. It is important to highlight that the New Law is subject to Implementing Regulations which are yet to be published

Turnover and Market Share Thresholds:

• The New Law applies to economic activities conducted both within and outside the UAE, with expanded definitions of relevant market also including a “digital place”
• Tiered Fee Structure for Substantive Examination Fees: The Old Law used to mandate that where the combined market share exceeded 40%, transactions needed to be filed. Now, under the New Law, such thresholds based on turnover and market share, potentially leading to increased filings with the UAE Ministry of Economy (the MOE). *Note that these amounts / percentages are to be determined in the Implementing Regulations

Merger Filing and Review Process:

• Filings with the MOE must now be made at least 90 days prior (extended from original 30 days) to the transaction's completion. The MOE will issue decisions on proposed transactions within specific timeframes, including unconditional approval, conditional approval, rejection, or declining to exercise jurisdiction. Significantly, under the Old Law, if the MOE failed to make a decision within 90 days, it was deemed to be approved however now under the New Law, it shall be deemed to be rejected.

Exemptions

• Certain entities and agreements are exempt from the New Law, including UAE government-owned entities and specific goods or services regulated by other laws. Given the Old Law allowed for entire sectors to be exempt, and now under the New Law it is just certain entities and agreements, businesses need to be careful and consider whether they now fall under the ambit of the New Law. Further and more notably, exemptions for small and medium-sized enterprises have been removed, further emphasizing the need for businesses to be cautious as to their obligations

Fines

• Failure to comply with filing requirements may result in fines ranging from 2 to 10 percent of total annual revenues achieved by the party from the relevant product or service in the UAE during the previous fiscal year. We anticipate that the publication of Implementing Regulations will provide further clarity on thresholds and percentages for filings. In the meantime, it's crucial for businesses to be aware of these new requirements, especially when engaging in transactional activities in the UAE. For any questions or assistance navigating these regulatory changes, please don't hesitate to reach out to us at admin@bankslegal.com to ensure your business adheres to requisite laws in the UAE