Strategic4 - Saudi Arabia M&A Compliance

Sep 1, 2025

Navigating the New Regulations: A CEO's Guide to M&A Compliance with CMA and GAC

Navigating the New Regulations: A CEO's Guide to M&A Compliance with CMA and GAC

Navigating the rules of the CMA and GAC is critical to any transaction's success. This guide provides a CEO-level overview of the key Saudi Arabia M&A regulations and timelines to ensure your deal avoids costly delays and achieves its strategic goals.

Navigating the rules of the CMA and GAC is critical to any transaction's success. This guide provides a CEO-level overview of the key Saudi Arabia M&A regulations and timelines to ensure your deal avoids costly delays and achieves its strategic goals.

Strategic4 - Mohammad As'ad, MBA, CFA

Mohammad As'ad

Partner

In every major M&A deal, the most important parties are often the ones not seated at the negotiating table. In the Kingdom, your transaction has silent but powerful partners: the regulators. The Capital Market Authority (CMA) and the General Authority for Competition (GAC) set the rules of the road, and a failure to navigate them correctly can delay or even derail the most strategic of deals. Understanding their distinct roles, requirements, and timelines is not just a legal formality; it is a critical component of your M&A strategy. This guide provides a clear, CEO-level overview to ensure you are prepared.

In every major M&A deal, the most important parties are often the ones not seated at the negotiating table. In the Kingdom, your transaction has silent but powerful partners: the regulators. The Capital Market Authority (CMA) and the General Authority for Competition (GAC) set the rules of the road, and a failure to navigate them correctly can delay or even derail the most strategic of deals. Understanding their distinct roles, requirements, and timelines is not just a legal formality; it is a critical component of your M&A strategy. This guide provides a clear, CEO-level overview to ensure you are prepared.

In every major M&A deal, the most important parties are often the ones not seated at the negotiating table. In the Kingdom, your transaction has silent but powerful partners: the regulators. The Capital Market Authority (CMA) and the General Authority for Competition (GAC) set the rules of the road, and a failure to navigate them correctly can delay or even derail the most strategic of deals. Understanding their distinct roles, requirements, and timelines is not just a legal formality; it is a critical component of your M&A strategy. This guide provides a clear, CEO-level overview to ensure you are prepared.

The Most Important Parties in Your Deal Aren't at the Table

In every major M&A deal, the most important parties are often the ones not seated at the negotiating table. In the Kingdom, your transaction has silent but powerful partners: the regulators. The Capital Market Authority (CMA) and the General Authority for Competition (GAC) set the rules of the road, and a failure to navigate them correctly can delay or even derail the most strategic of deals. Understanding their distinct roles, requirements, and timelines is not just a legal formality; it is a critical component of your M&A strategy. This guide provides a clear, CEO-level overview to ensure you are prepared.


The Regulatory Trinity: Knowing the Key Players

Before diving into specifics, it's crucial to understand who you're dealing with. The landscape of Saudi Arabia M&A regulations is primarily governed by three bodies with distinct mandates:

  • The General Authority for Competition (GAC): The guardian of fair competition. The GAC reviews any transaction, public or private, that could lead to a dominant market position, ensuring a level playing field.

  • The Capital Market Authority (CMA): The watchdog of the Tadawul (Saudi Stock Exchange). The CMA’s focus is on deals involving listed companies, protecting shareholders, and ensuring transparency and market integrity.

  • The Ministry of Investment (MISA): For any foreign party in a deal, MISA is the gateway. It manages the foreign investment framework, issuing the necessary licenses for overseas entities to operate and invest in the Kingdom.


The GAC Gauntlet: Competition and Merger Control

For nearly every significant M&A deal in the Kingdom, your first regulatory port of call will be the GAC.

  • When to File: A notification to the GAC is mandatory if the total annual turnover of all parties involved in the transaction exceeds SAR 200 million. This is a critical threshold.

  • What GAC Looks For: The GAC’s review is not about the financial merits of your deal, but about its potential impact on the market. They analyze whether the transaction will lead to an "economic concentration" that could substantially reduce competition. This is the cornerstone of competition law in KSA.

  • The Timeline: Securing GAC merger approval is not an overnight process. The authority has up to 90 days from the date it receives a complete filing to make a decision. This regulatory waiting period must be factored into your deal's closing timeline from the very beginning.


The CMA Mandate: Rules for the Public Market

If your transaction involves a company listed on the Tadawul, you enter the domain of the CMA. The CMA M&A rules are extensive, but for a CEO, two concepts are paramount:

  • The Mandatory Tender Offer (MTO): If your acquisition results in you owning 30% or more of a listed company's voting shares, you are generally required to launch an offer to buy out all other remaining shareholders at the same or a higher price. This rule is designed to ensure all shareholders are treated equitably.

  • Disclosure and Transparency: The CMA enforces strict rules on when and how a potential deal must be disclosed to the public to prevent leaks and insider trading.


Strategic Implications for Your Deal

Understanding these regulations is not just your legal team's job; it directly impacts your strategic planning.

  • Build a Realistic Timeline: Acknowledge the 90-day GAC review period. Factor in time for preparing comprehensive filings for both regulators. A realistic timeline prevents deal fatigue and manages stakeholder expectations.

  • Assemble the Right Team: Successful navigation requires sophisticated legal counsel with a proven track record of dealing with both the GAC and CMA. This specialized expertise is a critical component of your legal due diligence in Saudi Arabia.

  • Structure for Success: Early engagement with your advisors can help structure the transaction in a way that anticipates regulatory scrutiny and smooths the path to approval.


Compliance Isn't a Hurdle; It's a Strategy

The Saudi regulatory landscape is robust, transparent, and designed to foster a healthy, competitive market. Viewing the GAC and CMA as hurdles to be overcome is a strategic error. Instead, see them as integral stakeholders. By building their requirements into your M&A strategy from day one, you de-risk the transaction, accelerate your timeline, and position your deal for a successful and seamless closing.

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