The new rules will take effect from March 2025.
The UAE Cabinet has recently issued Decision No. (3) of 2025, which confirms the filing thresholds for the new merger control regime that will take effect on 31 March 2025.
This decision provides essential clarity to the framework established in December 2023, and stakeholders anticipate that further details will emerge with the publication of the upcoming Implementing Regulations.
Under the new guidelines, any “Economic Concentration,” which includes mergers, acquisitions, or joint ventures, must be reported to the UAE Ministry of Economy (MoE) at least 90 days prior to completion if certain conditions are met.
Specifically, a merger control filing is required if:
- The total annual sales of the concerned establishments in the relevant market within the UAE exceed AED 300 million (approx. USD 82 million) during the previous fiscal year; or
- The total market share of the concerned establishments exceeds 40% of the total transactions in the relevant market within the UAE during the previous fiscal year.
Fines for non-compliance
Failing to notify the MoE about a qualifying transaction could result in significant penalties. Violators may face fines ranging from 2% to 10% of their annual revenue from the relevant goods or services sold in the UAE.
With the new filing thresholds set to take effect soon, businesses operating in the UAE will need to evaluate their M&A transactions against these thresholds, particularly if they anticipate completing deals after 31 March 2025. It is crucial for companies to incorporate the potential need for MoE notification into their deal timelines, as approvals may take longer than the stipulated 90 days, especially if the MoE requests additional information during the review process.
While the announcement of the new filing thresholds marks a step towards clearer guidelines in the UAE’s merger control regime, several uncertainties still exist. Questions remain regarding the definition of the “relevant market” concerning the goods and services affected by transactions, the treatment of minority acquisitions, and whether certain types of joint ventures will be included in the filing requirements.
Additionally, it is unclear how the abolishment of previous exemptions, such as those for government-owned entities, will impact future transactions. However, an exemption remains for entities owned by the UAE Federal Government or local emirate governments, though specifics on applicable entities are yet to be defined.
Stakeholders are hopeful that the forthcoming Implementing Regulations or other legislative guidance will address these unresolved issues and provide much-needed clarity on the new merger control regime.
