UAE Merger Control Update: Implementing Regulations Now In Force

Implementing Regulations clarify some points, but fall short on others .

Introduction –

On 27 October 2014 the Implementing Regulations (the Regulations) for the UAE Federal Law No. 4 of 2012 (the Competition Law) came into force. While the Regulations offer some clarification on merger control filing requirements and the review process, they fail to address certain key issues.

Background on the UAE Competition Law –

The Competition Law came into force on 23 February 2013. The Competition Law requires that the Ministry of Economy give merger control clearance of certain acquisitions of control which exceed market share thresholds for the “relevant market,” as determined by the UAE Federal Cabinet, and which may affect competition in the relevant market by creating or enhancing a dominant position.

Please see full alert below for more information.

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Latham & Watkins Mergers & Acquisitions Practice February 2, 2015 | Number 1794
UAE Merger Control Update: Implementing Regulations Now
In Force
Implementing Regulations clarify some points, but fall short on others
Introduction
On 27 October 2014 the Implementing Regulations (the Regulations) for the UAE Federal Law No. 4 of
2012 (the Competition Law) came into force. While the Regulations offer some clarification on merger
control filing requirements and the review process, they fail to address certain key issues.
Background on the UAE Competition Law
The Competition Law came into force on 23 February 2013. The Competition Law requires that the
Ministry of Economy give merger control clearance of certain acquisitions of control which exceed market
share thresholds for the “relevant market,” as determined by the UAE Federal Cabinet, and which may
affect competition in the relevant market by creating or enhancing a dominant position.
The Competition Law provides that implementing regulations would define the limits of economic
concentration and address other matters.
The Minister of Economy has 90 days from the date of receipt of a filing to make a decision (extendable
by a further 45 days) and the transactions cannot complete without the Minister of Economy’s approval or
deemed approval.
For further information and analysis on the Competition Law please see How New UAE Competition Law
Will Impact Business.
What the Implementing Regulations Achieve
The Implementing Regulations:
• Clarify what information is required to be included in a merger control filing
• Clarify what criteria the Ministry of Economy will consider when reviewing a filing for merger control
clearance
• Set out a process to appeal the Minister of Economy’s determination on a filing for merger control
clearance
Where the Implementing Regulations Fall Short
The Implementing Regulations:
Latham & Watkins February 2, 2015 | Number 1794 | Page 2
• Do not specify the market share thresholds which trigger a filing – the Implementing Regulations
indicate that such thresholds will be determined by the UAE Federal Cabinet. Although on the face of
the Competition Law and Implementing Regulations no filing is required until the market share
thresholds are determined by the UAE Federal Cabinet and exceeded, we understand that the
Ministry of Economy is currently expecting filings on all potentially qualifying transactions, which is
unusual.
• Do not address the basis for carrying out a substantive analysis of competition impact at the stage of
determining whether a filing is required (an analysis which typically would not be required at the
notification stage). For example, no guidance is provided on how narrowly or broadly the “relevant
market” should be defined.
• Appear to require an unsigned draft sale and purchase agreement to be submitted with an application
at least 30 days prior to the date of executing the sale and purchase agreement, rather than a signed
sale and purchase agreement with a merger control clearance condition. We understand that once a
filing is made, the Ministry of Economy will issue a certificate of initial submission which entitles the
parties to execute the sale and purchase agreement with a merger control clearance condition.
• Do not clarify the interaction between the 30 day period referred to above and the 90 day period
which the Minister of Economy has to make a decision (extendable by a further 45 days) on a filing
for merger control clearance.
The Way Forward
We hope the Ministry of Economy will provide further clarity on the issues raised in this note in due
course.

If you have questions about this Client Alert, please contact one of the authors listed below or the Latham
lawyer with whom you normally consult:
Christopher Lester
chris.lester@lw.com
+971.813.4825
Abu Dhabi

Eyad F. Latif
eyad.latif@lw.com
+971.2.813.4880
Abu Dhabi

You Might Also Be Interested In
How New UAE Competition Law Will Impact Business
Doing Business in the United Arab Emirates – Understanding the Abu Dhabi and Dubai Laws and Legal
System

Latham & Watkins February 2, 2015 | Number 1794 | Page 3

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