SAUDI ARABIA Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Omar Halbouni and Shahad Al-Humaidani, GLA & Company
3. Procedure: Notification to Clearance 3.1 Deadlines for Notification With respect to the notification required when the KSA Competition Law and the Implementing Regulations apply to a specific economic concentration, the rel - evant participants must notify the GAC 90 days before the completion of the economic concentration. See 2.2 Failure to Notify with respect to penalties and their imposition. 3.2 Type of Agreement Required Prior to Notification As part of the initial application for notification to the GAC, the applicant must also provide a finalised, duly executed agreement to carry out the economic con - centration, stating the nature of the transaction and a description of the shares, equity, assets, rights or obligations to be purchased or transferred or man - agement to be joined between the relevant entities. The GAC requires these documents for a valid noti - fication. If a notification is made without all requisite documents, the GAC reserves the right to close the notification file. 3.3 Filing Fees The fee payable for examining the economic con - centration (the “notification fee”) is 0.02% of the total annual sales value of undertakings intending to partic - ipate in the economic concentration, with a maximum of SAR250,000. The parties must pay the notification fee after submitting the notification and must submit evidence of payment of the notification fee along with the other notification documents and information. The GAC requires evidence of payment before the notifica - tion will be considered complete. 3.4 Parties Responsible for Filing The parties intending to participate in the economic concentration transaction must notify the GAC of the transaction. Notice of the transaction may be provided by the parties’ legal representative. A failure by the concentration parties to submit a notification does not preclude the GAC from initiating a review and assess - ing the economic concentration either before or after the transaction’s completion.
that an economic concentration that would otherwise cause competition problems may nonetheless be approved if the failing firm is likely to exit the market even without the economic concentration. The basic requirement for a “failing firm defence” is that the deterioration of the competitive structure that follows the economic concentration will take place with or without the economic concentration and there - fore cannot be said to be caused by the economic concentration. The GAC will generally only consider a “failing firm defence” to be appropriate if the economic concentra - tion parties can demonstrate all three of the following criteria: • that it is highly likely or inevitable that the alleg - edly failing undertaking would, in the near future, be forced to exit the market because of financial difficulties if it is not taken over by another under - taking; • that the assets of the failing firm would also be highly likely or inevitable to exit the market if they do not participate in an economic concentration; and • that there is no less anti-competitive alternative purchase or other alternative to the notified eco - nomic concentration. The onus is on the relevant parties to provide the GAC, in due course, with the “failing firm defence”, with all the relevant information necessary to demonstrate this. 2.15 Circumstances Where Implementation Before Clearance Is Permitted There are no circumstances under which the authori - ties will permit closing before clearance or an exemp - tion. It may be possible to carve out the businesses or assets in Saudi Arabia and implement a global closing to the extent that the closing does not have a sufficient effect on the Saudi Arabian market (see 2.8 Foreign- to-Foreign Transactions ). However, GAC approval may be required.
527 CHAMBERS.COM
Powered by FlippingBook