2024 saw the announcement of several material developments in merger control regulation throughout the MENA region. Some have been implemented, such as the introduction of the new Egyptian pre-closing notification merger control regime. Others significant developments—such as the introduction of turnover based notification thresholds in the UAE—remain pending. This client brief looks at the the most relevant developments in merger control regulations in Egypt, Saudi Arabia, the UAE, and COMESA.

Egypt

The Egyptian Competition Authority (ECA) started enforcing the new country’s pre-closing notification merger control regime on 1 June 2024. Shortly before that—end of May—the ECA released new filing forms, as well as rudimentary guidelines including a new interpretation of the notification threshold as well as establishing a simplified review procedure.

The amendments to the Egyptian Competition Law introduced end of December 2022 established two notification thresholds:

• the domestic notification thresholds that requires at least two parties to the transaction have turnover/assets in Egypt; and
• the international notification threshold, which only requires one party to have turnover/assets in Egypt.

The law does not specify which party has to have turnover/assets in Egypt to satisfy the local turnover/asset requirement of the notification thresholds. This was initially understood—including by the ECA—as filing under the international notification threshold being required even where the acquirer alone meets the threshold. In their May 2024 guidelines the ECA took a different position. The guidelines only consider the international notification threshold to be met, where the target meets the Egyptian turnover/asset requirement. The domestic notification threshold remained unchanged and can still be met without Egyptian turnover/assets of the target.

In addition to the new interpretation of the threshold, the guidelines introduced a simplified review procedure. This simplified procedure is reserved for transactions that do not pose significant competition concerns in Egypt, for which the guideline includes a catalogue of criteria. The simplified procedure makes use of a separate, short form filing form. Most notably this short form filing form does not require the parties to disclose prior transactions. Also, the review period is shorter with only 20 business days.

Looking back at the first six months of application of the new regime, we can draw some lessons on how the ECA conducts their review. A pre-filing phase is not contemplated in the regulations. However, in practice, the ECA conducts and initial, pre-filing review except in very simple transactions. During this pre-filing review, the ECA will issue material requests for information (RFI) aimed to resolve questions they may have on the deal structure, relevant market, and potential impact of the transaction on competition. To do so the ECA will often request meetings with representatives of the parties without justification why questions they have must be addressed by the parties directly. Often the questions raised could be addressed easily by legal counsel or in written responses. Furthermore, the ECA has consistently refused to provide an overview of questions they will ask or an agenda making it difficult to assess who may be best suited to attend the meeting to address the ECA’s questions. Nonetheless, in some cases involving representatives of the parties can be avoided, and the ECA has in some cases accepted to hold initial discussions with legal counsel only.

How long it will take to conclude the unofficial pre-filing phase will vary depending on the transaction. Deal structures that are unfamiliar to the ECA require increased and often multiple engagements with authority staff. Furthermore, the ECA has in some transaction shown considerable interest in international markets, even where the transactions had little relevance to Egypt. Both will considerably delay declaration of completeness of filing. Parties making filings in Egypt need to consider this when assessing timelines.

Saudi Arabia

On 1 July 2024 the Saudi General Authority for Competition (GAC) announced proposed changes to their merger guidelines. Most notably, these amendments introduce changes to the notification thresholds that required the target to have at least some activities in Saudi Arabia for a filing obligation to arise. The amendments were supposed to enter into effect in the summer. However, they have not been implemented so far.

The proposed amendments to the guidelines require an acquisition to be notification only, if the target has some turnover in Saudi Arabia. They do not clarify how significant the target’ Saudi turnover must be for a filing obligation to be triggered. What is clear is that the target will itself not have to meet the SAR 40 million (approx. USD 10.4 million) Saudi turnover threshold. Moreover, joint ventures will still require notification, if the joint venture has no turnover in Saudi Arabia. The joint venture parents meeting the local turnover threshold will suffice.

In addition to the amendment of the threshold the GAC proposed a 12 months’ deadline for clearance decisions, including further details on the concept of control in, as well as an exemption for foreign-Saudi joint ventures that manufacture goods in Saudi Arabia that are currently not or only scarcely available in the Kingdom.

Initially there appeared to be some momentum in getting these changes implemented. However, since the amended guidelines were not issued end of summer 2024, and the GAC did not provide an updated timeline for their implementation, the fate of the amendments is uncertain. Furthermore, the GAC Governor HE Dr. Abdulaziz Al-Zoom leaving the authority end of 2024, may further delay the amendments.

Untied Arab Emirates

The UAE legislator in late 2023 enacted legislation comprehensively overhauling the country's competition regime. The amendments were scheduled to take effect on 31 January 2024. Yet, since amended executive regulations to the new law are still outstanding, the old regime remains in effect until now. Furthermore, we have to date not seen any meaningful affords of the UAE government to increase staffing and capacities of the UAE competition authorities to administer an active merger control regime.

The amendments introduce turnover based thresholds that will apply alongside the existing market share based notification threshold. The amended law does, however, not include the new turnover based thresholds. Also, it does not address whether the market share based threshold will be amended and whether the different thresholds will apply individually or collectively. We expect these details to be covered in the pending executive regulations.

The amended law also abandoned the extensive exemptions included in the old law. Small and medium-sized enterprises will be fully subject to the new competition law and all sector specific exemptions have been dropped. The amended law instead gives sector specific regulators authority to exempt the industry they oversee from the application of the UAE competition law. The only statutory exemption that was upheld is the exemption for government owned entities.

Finally, the amended law provides that where the authority does not render their decision on the transaction within the statutory review period, the transaction is deemed objected to. Hence, transactions will have to be actively cleared under the new regime for the parties to be allowed to implement them.

COMESA

In early 2024 The Common Market for Eastern and Southern Africa (COMESA) Competition Commission (CCC) proposed amendments to the COMESA competition regime. The most relevant changes proposed in the new draft regulations is the shift of the COMESA merger control regime from a voluntary, non-suspensory to a mandatory and suspensory merger control regime.

Under the current regime a transaction that meets the notification requirements shall be notified to the CCC within 30 days of the decision to implement the transaction being taken. However, a notification does not trigger a stand-still obligation. The parties are free to close the transaction at any time regardless of whether the CCC rendered their decision. Still, in closing prior to CCC approval, the parties assume the risk that the CCC imposes remedies or prohibits the transaction after they closed the deal. The new draft regulations introduce a stand-still obligation and makes notification to the CCC mandatory. Hence, once the amendments have been implemented, parties will have to notify transactions to the CCC, if the filing requirements are met, and hold off on closing until the CCC cleared the transaction.

The new draft regulations maintain the dual concept of regional dimension and turnover and asset based thresholds as requirements for a notification. However, neither concept is defined in the new draft regulations. Both are left to be determined by the board of the CCC with the approval of the Council of Ministers of the COMESA Common Market. Hence, amendments to how the regional scope criterion is defined as well as the notification threshold may be pending.

Initially, the changes were to come into force by the end of 2024. At this point it is unclear when the amendments will be implemented.