KUWAIT Law and Practice Contributed by: Yousef Al Shereedah, Abdulrahman Al-Roumi and Bashayer Al-Tuwais, International Counsel Bureau – Lawyers and Legal Consultants
holders at least five days before the end of the initial offer review period. Non-cash voluntary acquisitions The CMA Regime allows non-cash (in-kind) con - sideration for acquisitions. Acquirers offer shares or other assets in place of cash. For example, as part of the KFH-AUB merger process, KFH car - ried out an in-kind acquisition of AUB Bahrain. In such a case, the acquirer must increase its share capital, secure a CMA approval, and disclose the process fully to all shareholders. Reverse acquisitions Reverse acquisitions occur when an acquirer secures 50% or more of a listed company’s shares. The acquirer must notify the CMA and announce the transaction on Boursa Kuwait to ensure all stakeholders are informed. Any changes during the process must be prompt - ly reported. The acquisition must comply with CMA regulations, proper documentation, and equitable treatment of all shareholders. Mergers Under CMA and CBK Compliance Requirements A merger process typically begins with an agree - ment between the merging parties and obtaining the approval of the CMA and CBK before it is presented to shareholders. If the merger results in a change of control, the identities of the new controlling entities and any potential conflicts of interest must be disclosed. Independent advis - ers must provide objective assessments to safe - guard fairness in the process. Key updates relat - ed to the change of control must be announced publicly through Boursa or the banks’ websites (or both) at each critical stage to maintain trans - parency. Furthermore, merging banks must comply with CPA regulations to prevent market dominance, with trading in the banks’ shares
being temporarily suspended to prevent manip - ulation or misuse during the merger process. Boursa Kuwait requirements The Boursa Kuwait Rulebook outlines the requirements for transferring ownership of shares in listed companies focusing on scenar - ios that require approval, conditions for block trades, and specific exemptions. • Scenarios requiring Boursa Kuwait approval: Boursa Kuwait mandates approval for share transfers in certain cases, including (i) set - tlements between creditors and debtors or collateral holders; (ii) transfers initiated by a pledgee following a debtor’s default; (iii) transfers needed to secure board member - ships; (iv) transfers resulting from enforce - able court judgments; and (v) transfers by government entities as part of privatisation efforts. Other permitted cases include internal transfers within corporate groups, employee stock option plans, and transfers resulting from mergers, acquisitions, or demergers. • Conditions for block trades: Block trades involve prearranged sales of shares between buyers and sellers. Such block trades require the approval of Boursa Kuwait and must be conducted through a licensed broker to ensure transparency. Block trades must meet specific conditions, including (i) a minimum value of KWD150,000; (ii) shares fully owned by the seller without restrictions unless waived by the beneficiary; and (iii) a price that does not deviate by more than 20% from the last closing price (ie, a premium cap). • Exemptions from Boursa Kuwait approval: Certain transfers, such as those resulting from inheritance or occurring between family members, are exempt from Boursa approval and may be processed directly through the Kuwait Clearing Company K.S.C. (KCC).
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