UNITED ARAB EMIRATES Law and Practice Contributed by: Yasser Omar and Laryssa Perkins, Hadef & Partners LLC
entity (ie, mainland or free zone), the subject matter of the proposed transaction (ie, shares or business assets) and the commercial objectives of the parties. M&A activity in the UAE continues to be mostly com - prised of private share sale transactions, driven by sovereign wealth funds, family offices and strategic corporate acquirers. While the nation’s capital mar - kets have seen unprecedented growth in IPO activity over recent years, this has not fundamentally shifted the M&A landscape. Public M&A, particularly hostile takeovers, remain rare due to the concentrated own - ership structures of many listed companies. 3.2 Regulation of Domestic M&A Transactions M&A transactions involving private UAE company tar - gets (whether mainland or free zone) primarily need to comply with the governing documents and applica - ble regulations for the target entity, which may involve board and/or shareholder approval. If the transaction involves a change of control or change of manage - ment, the transfer of encumbered shares or assets, or the transfer of regulatory licences, approvals or notifi - cations may also need to be sought by the target from certain third parties. For mainland targets, if the buyer is a foreign entity, the relevant DED will typically require notarised and legalised copies (in Arabic) of the buyer’s constitu - tional documents, and the power of attorney author - ising representatives of the buyer to sign the relevant transaction documents. The share/asset sale/pur - chase agreement must also be notarised by a notary public or a contracts authenticator. For a share transfer, the approval of the relevant DED or free zone authority is typically required. Depending on the transaction, further regulatory approvals may also be required such as from the Minister of Econo - my (the “Minister”) (see 6. Antitrust/Competition ), the municipality in the relevant emirate, the CBUAE or the relevant financial regulator. Acquisition Free zone The specific requirements for an acquisition of a UAE target incorporated in a free zone will vary depending
on which free zone the target company is incorporated and operating in. Mainland (private) In addition to the general consideration set out above, if the target entity is a private joint stock company, there are specific requirements to be satisfied in rela - tion to an acquisition, including Article 266 of the CCL, which only permits a transfer after the balance sheet and profit and loss statement for at least one fiscal year since the registration of the company in the commercial register has been published, unless the transfer is, for example, to another shareholder or the private joint stock company has offered its shares for private subscription and its shares are listed on a financial market in the UAE. Mainland (public) Any acquisition of shares that will result in a party directly, or indirectly as part of a related party group, holding or increasing their holding to 30% or more of the shares in a public joint stock company incorpo - rated in the UAE, whose shares have been offered for public subscription or have been listed on one of the financial markets in the UAE, must comply with the conditions and procedures issued by the Securities and Commodities Authority (SCA) under Decision of the Chairman of the SCA Board No 18/RM of 2017 Concerning the Rules of Acquisition and Merger of Public Shareholding Companies and SCA Admin - istrative Resolution No 62/RT of 2017 on Technical Requirements for the Acquisition and Merger Regime (collectively, the “SCA M&A Rules”). Merger Free zone The specific requirements for a merger with or between UAE companies incorporated in a free zone will vary depending on which free zone the UAE merging com - panies are incorporated and operating in. Mainland A merger involving onshore companies must comply with Chapter 2 (Merger) of Title 7 (Conversion, Merg - er, and Acquisition of Companies) of the CCL. Where the companies are private joint stock companies, the merger is also subject to Ministerial Decision No 137 of 2024 on the Regulation of the Registrar’s Work,
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