Completion of Merger Procedures with the Relevant Authorities in Saudi Arabia

What is a Merger?
A merger is a legal process in which two or more companies combine to form a single entity, to achieve higher operational efficiency, increase market share, and reduce costs. In Saudi Arabia, mergers are carried out by the regulations of the Ministry of Commerce, the Capital Market Authority, and the General Authority for Competition to ensure compliance with commercial and investment laws.

Relevant Authorities for Merger Procedures in Saudi Arabia:

• Ministry of Commerce: To approve the change in the legal entity and update the commercial registry.

• Capital Market Authority: If one of the merging companies is listed on the stock market.

• General Authority for Competition: To ensure that the merger does not harm market competitiveness.

• General Authority of Zakat, Tax, and Customs: To review tax obligations.

• Chamber of Commerce: To document final contracts and agreements.

Procedures for Completing the Merger with Official Authorities:

1. Prepare the Required Documents:

    

   • Decision of partners or board of directors approving the merger.
   • Prepare a draft merger agreement by the Ministry of Commerce’s requirements.
   • Evaluate the assets and liabilities of the companies to ensure fair distribution of shares or stakes.
   • Prepare the audited financial statements for each company before the merger.

2. Submit the Application to the Ministry of Commerce:

    

   • Fill out the merger application form via the Ministry of Commerce platform.
   • Attach the merger agreement, financial statements, and partner or shareholder resolutions.
   • Pay the required administrative fees.
   • Wait for the Ministry’s approval and the publication of the merger in official newspapers.

3. Obtain Approval from the Competition Authority (If Required):

    

   • Submit a formal request to the authority to review the impact of the merger on the market.
   • Prove that the merger does not lead to monopolies or disrupt commercial balance.
   • Wait for final approval before completing the procedures.

4. Update the Commercial Registry:

    

   • Modify business details in the commercial registry system.
   • Change the company’s name (if necessary) and issue the new activity license.
   • Notify clients and suppliers of the new legal entity.

5. Resolve Financial and Tax Matters:

    

   • Submit the final tax declarations for each company before the merger.
   • Update tax and zakat records with the General Authority for Zakat and Tax.
   • Transfer licenses, contracts, and financial obligations to the new entity.

The Importance of Consulting a Specialized Legal Advisor:
The merger process requires high legal precision, and working with a specialized legal team helps to:

• Ensure full compliance with all Saudi regulations.
• Avoid legal obstacles that may delay the merger process.
• Negotiate with various parties to secure the best terms.
• Seamlessly document and transfer contracts and licenses to the new entity.

Contact DAG Law Firm and Legal Consultancy now to help you complete the merger procedures smoothly and in accordance with Saudi regulations!