Saudi Arabia Amendments to Notification Threshold and Filing Fee

Saudi Arabia to amend notification threshold and lower filing fee cap for merger control review

The General Authority for Competition (GAC) today officially announced that they are considering two amendments to the Kingdom’s merger control regime. They are proposing to increase the notification threshold from currently SAR 100 million (approx. USD 26 million) to SAR 200 million (approx. USD 52 million). Furthermore, GAC proposed lowering the filing fee cap for merger control review from currently SAR 400,000 (approx. USD 106,000) to SAR 250,000 (approx. USD 66,000). The announcement came as part of a request by GAC for public consultation on the amendments to the merger control regime. The amendments will be open for comments from the public until 4 January.

The proposed amendment to the notification threshold only concerns the amount of the threshold itself. It will not amend the basis of calculation. Hence, after the amendment notification under the Saudi merger control regime will be required for any transaction the parties to which have a combined annual worldwide revenue of SAR 200 million or more, provided of course that they meet the other criteria for notification.

Similarly, the proposed amendments to the filing fee will not change the way the filing fee is calculated. GAC will—under the proposed amendment—continue to calculate the filing fee as the combined, annual worldwide revenue of the parties to the transaction multiplied by 0.0002. Only the cap will be lowered from SAR 400,000 to SAR 250,000.

The amendment of the notification threshold will be more relevant for domestic transaction. Smaller foreign-to-foreign transactions already frequently do not require notification in Saudi Arabia under the current regime as they will typically not meet the local effects test. The parties to foreign-to-foreign transactions that have a local effect in Saudi Arabia within the meaning of the country’s merger control regime, on the other hand, will typically have worldwide revenue that far exceeds SAR 200 million. Still, the proposed amendment to the filing fee cap will be very welcome to foreign and domestic companies alike as it will substantially reduce the cost of filing in Saudi Arabia. This will likely also result in an increase of notifications in Saudi Arabia and increased adherence to the Kingdom’s merger control regime as it will lower the cost of doing so in comparison to the risk of avoiding a filing.