SAUDI ARABIA Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Khaled al-Khashab and Shahad Al-Humaidani, GLA & Company
2.7 Businesses/Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds Please see 2.8 Foreign-to-Foreign Transac- tions . The KSA Competition Law specifies “all the enti - ties participating in the concentration” and does not distinguish between acquiring and selling an entity or between mergers and acquisitions. The KSA Competition Law therefore requires that the notification threshold considers the total sales of all entities participating in the concentration without distinction or exclusion. The GAC considers that the entities “participat - ing” in the concentration are all those that form part of the newly concentrated entity after the economic concentration transaction has been completed. • Where two or more entities merge, the rel - evant entities are the merging entities in their entirety. • Where one entity acquires another entity, the relevant concentrated entities are the entire entity that is acquiring the other entity and the entity being acquired but not the entity that is selling the entity being acquired. • Where one entity acquires a part of another entity’s operations, for example through pur - chasing a subsidiary or operational division, the relevant entities are: (a) the entire entity which is acquiring the operations or division; and (b) the operations or division it is acquir - ing but not the entity which is selling the operations or division. This is because the acquiring entity and the target opera - tions or division generally form(s) part of (and are therefore participating in) the economic concentration but the selling
erally apply the same principles to determine the relevant annual sales of the individual. The indi - vidual’s annual sales will generally be their annu - al revenue amounts obtained from their ordinary business activities. The GAC will determine this on a case-by-case basis within the context of these general principles. However, where the entity’s total sales incorpo - rate sales rebates subsequently provided to its customers, the value of the sales rebates may be deducted from the gross sales figures to cal - culate the entity’s total sales for the purposes of the notification threshold. In addition, where the entity’s total sales rev - enues incorporate the amount of value added taxes and other taxes directly related to sales, the value of the taxes may be deducted from the gross sales figures to calculate the entity’s total sales for the purposes of the notification threshold. Lastly, the KSA Competition Law does not dis - tinguish between sales taking place within Saudi Arabia and those taking place outside the coun - try. The GAC will therefore consider the relevant annual sales figures to be the combined aggre - gate group wide and worldwide sales figures of all the relevant entities. Currency If the entity’s financial statements are presented in a non-Saudi Arabian riyals currency, the annu - al gross revenues should be converted to Saudi Arabian riyals according to the average over the relevant financial year of the foreign exchange rate quoted by the Saudi Arabian Central Bank.
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