KUWAIT Law and Practice Contributed by: Ezekiel Tuma, John Cunha and Luis Cunha, ASAR – Al Ruwayeh & Partners
ASAR – Al Ruwayeh & Partners Assima Tower Floors 37 Othman Bin Affan Street, Mirqab P.O. Box 447,
Safat 13005 Kuwait City State of Kuwait Tel: +965 2292 2700
Email: asar@asarlegal.com Web: www.asarlegal.com
1. Trends 1.1 M&A Market
A key topic in cross-border transactions is the ulti - mate beneficial ownership rules issued by the Min - istry of Commerce and Industry (MOCI), which came into force during 2023. The rules are creating ongoing compliance issues and would have to be addressed as part of any M&A activity. Subject to certain exemptions (which include recent exemptions in favour of entities (and their majority- owned subsidiaries) listed on local and international stock exchanges which are subject to equivalent dis - closure/transparency rules regarding beneficial own - ership), the ultimate beneficial owner rules require companies to maintain a register of ultimate beneficial owners and to submit this register (and updates to it) to the MOCI. Also of significance, the Competi - tion Protection Authority (CPA) has continued to be increasingly active in merger control to ensure compli - ance with the Competition Law (Law No. 72 of 2020) (“Competition Law”). Transaction parties are now more aware of competition regulation issues. Financing considerations continue to impact on deal structures, particularly in relation to the provision of security for financing. We also noticed continued attention being paid to material adverse change claus - es. These issues are only amplified by the increased risk being posed by the Iranian conflict and the geo - political risk it raises.
We observed continued growth in M&A activity during 2025. While sectors such as healthcare and aviation remained robust, 2025 saw a distinctive surge in the oil, gas and utilities sectors. Although acquisition activity has been driven primar - ily by strategic buyers, a significant portion of recent transactions have been undertaken by financial inves - tors. We have also seen a trend towards business consolidation, particularly in the banking, oil and gas, and utilities sectors. Consistent with recent history, private M&A deals continued to outnumber public M&A transactions. Notwithstanding the above, geopolitical risk arising from the Iranian conflict may create headwinds for the market and could lead some investors to adopt a more cautious, “wait and see” approach. 1.2 Key Trends During 2025, there was continued use of locked box mechanisms, although completion accounts remain popular. Parties also remained interested in transac - tion break fees, but we have noticed an increased use of earn-outs (which is only likely to be amplified by the onset of the Iranian conflict). We also expect increased emphasis on material adverse change clauses as par - ties seek to protect themselves from the impact of unpredictable events.
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