The General Authority for Competition in Saudi Arabia introduces new merger control thresholds

A merger filing will be required if each of the following thresholds are met:

• the combined annual worldwide turnover of the parties to the transaction is at least SAR200 million (approx. USD52m/EUR50.3m); and
• annual worldwide turnover of the target is at least SAR40m (approx. USD10.4m/EUR10.1m); and
• the combined annual turnover of all parties to the transaction in Saudi Arabia is at least SAR40m (approx. USD10.4m/EUR10.1m).

The new thresholds mark a significant change from the previous thresholds, which required only that the combined annual worldwide turnover of all parties exceeded SAR200m.

Importantly, it appears that the domestic turnover threshold can be met by any party to the transaction, eg the acquirer or joint venture parents.

This is not the first change to the Saudi merger control rules this year. At the end of March 2023, the worldwide turnover of the parties’ threshold was increased from SAR100m to SAR200m. The authority also decreased the filing fee cap to SAR250,000 (approx. USD66,700/EUR62,700) from SAR400,000. This series of amendments indicates the GAC’s continued willingness to hone the Saudi merger control regime as its gains more experience of enforcing the rules.   

In practice, the GAC continues to strengthen its merger control enforcement. In 2021, the authority prohibited its first transaction – Delivery Hero’s planned acquisition of rival food delivery app The Chefz – on procedural grounds (see our alert for more details). A few months later, it blocked the proposed acquisition by National Gas and Industrialization Company of a 55% stake in Best Gas Carrier Company on the basis of substantive vertical competition concerns. In August this year, the GAC conditionally cleared outdoor advertising company Arabian Contracting Services’ acquisition of competitor Faden Media Agency, marking the authority's third-ever clearance with commitments.

It remains to be seen how the new thresholds will influence the number of transactions reviewed by the authority.