Mergers and acquisitions in Saudi Arabia are governed by the Companies Law (CL) issued by the Council of Ministers in 2016. The CL sets out the general framework for mergers and acquisitions in Saudi Arabia and provides the necessary guidance for parties involved in such transactions. Under the CL, a merger is defined as an arrangement between two or more existing companies whereby one company (the ‘surviving company’) absorbs the assets, liabilities, and shares of the other companies (the ‘transferor companies’) in exchange for shares of the same kind and class in the surviving company.
Both parties negotiate and agree on the terms of the merger
Both parties conduct a thorough investigation of each other's financial, legal, and operational status.
Both parties sign a MoU to formalize the agreement.
A legal agreement is prepared that outlines the terms and conditions of the merger.
The merger may require approval from relevant government bodies and regulatory agencies
The merged entities work to integrate their operations and systems
The merged entity must be registered with the relevant government agencies and obtain necessary licenses
Merging with another business can help companies increase market share and expand their reach.
By combining resources, knowledge, and expertise, merging companies can improve operations, increase efficiency, and reduce costs
Merging with another company can provide access to new markets and customer bases, increasing revenue and growth opportunities