INTRODUCTION

‍

On 08/04/2025G (corresponding to 10/10/1446H), the General Authority for Competition (“GAC”) of the Kingdom of Saudi Arabia (the “Kingdom”) announced updates to the Economic Concentration Review Guidelines to the GAC (the “Guidelines”), which took effect on publication. These updates bring important clarifications, reflect views already applied by GAC in practice since the last version of the Guidelines and introduce certain changes to the Kingdom’s merger control regime. The updates affect how mergers, acquisitions, joint ventures, and investment fund transactions are reviewed and reported, impacting on how businesses assess and report economic concentration transactions in the Kingdom.

KEY CHANGES

‍

The key updates in the Guidelines include the following:

• Clarified Definition of “Control” and “Change of Control”: it provides a refined definition of control, and explicitly introduces that control can also be expressed negatively, through the ability to block / veto the entity’s strategic and business decisions. The Guidelines also clarify that natural/fundamental minority protection rights are usually not considered negative control, even if they grant veto rights over certain decisions. Control can be legal or de facto and is determined based on influence, not just formal legal rights. Furthermore, the Guidelines explicitly include natural persons as parties subject to review and recognize joint or shared control, and situations in which influence arises through structural ties, financing arrangements, or coordinated behavior among shareholders.
• New Exemptions for Joint Ventures (“JVs”): it introduces exemptions for JVs under specific conditions: 1) the JV relates to the manufacture of a product not currently produced in the Kingdom, or that can only be supplied to certain parts of the Kingdom due to inherent technical constraints of the product, and 2) the JV partners are not actual or potential competitors, whether individually or collectively, of that product. Such exemption will support localizing manufacturing, as JVs meeting these criteria do not require notification to GAC.
• New Chapter on Investment Fund Transactions: it introduces a dedicated section on “Reporting Economic Concentration by Investment Funds”, drawing a distinction between passive and strategic investments, and granting investment funds an exemption in case a passive investment leads to a change of control: if the fund’s acquisition is solely for investment purposes, and the fund does not intervene directly or indirectly in the management of the company and therefore control will not be used to influence the company’s behavior in the market but only to maintain the value of the investment; and provided the fund does not control any competitors of the company.
• Reflecting Thresholds previously applied already in the Guidelines: it reflects the thresholds introduced and applied after the old Guidelines had been released, (i) the total worldwide annual sales of all relevant parties exceeding SAR 200 million; (ii) the total worldwide annual sales of the target exceeding SAR 40 million; and (iii) the total annual sales of all relevant parties in the Kingdom exceeding SAR 40 million. It provides also helpful interpretation on these thresholds, including that in case of an acquisition the relevant parties are the buyer and the target and how these thresholds are applied to mergers and joint ventures.
• Validity of GAC Approval: it provides that approvals are now valid for one (1) calendar year, with the option to extend upon a justified request, while notification remains mandatory within at least ninety (90) days prior to closing an economic concentration transaction.

CONCLUSION

‍

The updates made by the GAC to the guidelines are not merely regulatory improvements but are a clear response to the increasing challenges in modern market environments. These changes contribute to fostering a transparent and evolving competitive environment within the Kingdom, further strengthening the Kingdom’s position as a leading regional investment hub.