Merger Control Laws in the United Arab Emirates

With the rise of Merger and Acquisition (M&A) activity in the Middle East, the UAE remains the country with the highest activity closing 130 deals worth 11.68 billion USD in 2024. This increase in activity has also seen the UAE update its laws to enable the region to align its legislative practices with recognized international practices. This will help it retain its powerhouse brand in the region while facilitating the growth of the business environment. M&A activity is vital for, among others, economic growth, diversification and sustainable development making it necessary to have legislation that ensures the environment is suitable for fair, efficient and innovative markets. One of the ways this is done is by having merger control laws that prevent monopolies and anticompetitive practices while safeguarding consumer interests and ensuring economic development.
The Federal Decree no 36 of 2023 introduced an updated merger control regime. It established two thresholds that businesses must consider in order to determine whether to make a pre-merger notification to the UAE Ministry of Economy. A premerger notification ought to be made where the following apply:
1. The Turnover Threshold 

Where the total annual sales of the parties in the relevant market in the UAE exceeds AED 300 million during the latest fiscal year.

2. The Market Share Threshold

Where the total market share of the parties exceeds 40% of the total sales in the relevant market in the UAE during the last fiscal year.

Notably, the turnover threshold is a new introduction which consequently widens the scope of mergers that will have to go through the pre-merger notification process. This expansion increases the regulatory scrutiny lengthening the process and increases transaction costs. Additionally, the relevant market referred to by the thresholds consists of the relevant product market and the relevant geographic market. Relevant product market covers the products or services that consumers need and, they are characterised by their price, characteristics and the intended use. The relevant geographic market covers the physical or digital places where the supply and demand for products or services converge. This definition expands the scope by explicitly covering digital platforms and services unlike in the previous regime.

With these updates, the process and timeline for M&A activity have changed. If a transaction meets the stipulated threshold, it is now mandatory for the parties to make the pre-merger notification at least 90 days before the completion of the transaction. Once the notification is completed, the Competition Department has 90 days to issue a decision on the transaction. This review period may be extended by an additional 45 days if deemed necessary by the Competition Department. Additionally, any request for more information by the Competition Department stops the clock. The review period acts as a suspensory step that prevents the parties from progressing the M&A transaction until they receive the final decision. Failure to comply with this timeline attracts steep fines of not less than 100,000 AED and not more than 10% of the annual total sales or if the annual total sales cannot be computed, shall be a fine of not less than 500,000 AED and not more than 5,000,000 AED.

After the review, possible decisions rendered by the committee include an unconditional approval, a conditional approval, a rejection or declining to exercise jurisdiction if the transaction fails to meet the conditions for filing. For a conditional approval, the parties would be required to implement remedies to mitigate any adverse effects of the transaction on competition. These remedies can be a structural remedy like an asset divestiture or behavioural commitments where the parties make promises or obligations related to the future conduct pf the companies to prevent abuse of market power. However, it is important to note that this framework is quite new in the UAE and businesses will need to keenly watch how the Ministry of Economy and the Competition Department exercise their discretion in accepting or conditioning such remedies. To make the decision, the Ministry will apply a substantive test to assess whether the proposed transaction would significantly harm competition in the relevant market. Some of the questions asked would be whether the deal will give the parties too much power in the relevant market, whether the transaction reduces the choices available to the consumers or whether the transaction will make it difficult for other businesses to compete. This test aligns with international standards and focuses on fostering a competitive market built on principles of fairness with a focus on consumer protection.

The new law also broadens the scope to include economic activities happening outside the UAE that affect competition within the emirates. It is worth noting that there are exemptions to the new rules. Businesses owned by the government of an emirate, UAE federal government owned businesses and businesses that are under a sectoral agency that already sets out and enforces the competition rules fall under the exemption list. This means that if a transaction meets the prescribed threshold, it shall be exempted if there is a competent regulatory body with its own competition oversight. For example, entities regulated by the Telecommunications and Digital Government Regulatory Authority (TDRA), such as Etisalat and du, or those under the Securities and Commodities Authority (SCA), like licensed financial market operators, may be exempt. This ensures that businesses operate with certainty and ensures compliance by following the applicable law without duplicative oversight.

Some have criticised the changes for being too strict and unclear. However, the Ministry of Economy explained that the new rules were not to be viewed as a hinderance to economic development but as a mechanism put in place to ensure that the quality of the deals is maintained consequently protecting the deals from any scrutiny down the line making it safer and more predictable for foreign investors. Another noteworthy feature is the Ministry of Economy’s commitment to increasing transparency in its application of the law. The Ministry is expected to publish guidance and potentially summaries of decisions, giving the market insight into how the rules are applied in practice. This would promote legal clarity and allow businesses to benchmark their transactions against precedents.

The new regime requires a shift in how businesses plan M&A in the UAE. Most importantly, businesses should ensure early compliance by introducing structures for early assessment to ensure that the new laws on the pre-merger notification process are incorporated as part of the timeline when commencing the process. This ensures realistic expectations (including in the M&A contractual obligations) and that the parties maintain good relations with the Ministry. It is also vital to seek legal advice early in order to get guidance and remain aware of changes if any are made. The need for legal advice will no doubt increase the M&A costs and general compliance costs. However, by adopting these measures, companies can reduce the risk of penalties, increase deal certainty, and ultimately contribute to a more transparent and investor-friendly market environment.

REFERENCES
Cabinet Resolution No. (37) of 2014 on the Executive Regulations of Federal Law No. (4) of 2012 Concerning the Regulation of Competition

Cabinet Decision No. (3) of 2025 On the Thresholds Related to the Implementation of Federal Decree-Law No. (36) of 2023

Dentons, ‘UAE publishes new merger control filing thresholds’ (Dentons, February 2025)

https://www.dentons.com/en/insights/alerts/2025/february/17/uae-publishes-new-merger-control-filing-thresholds

Emirates News Agency, ‘Ministry of Economy reviews new Competition Law and its role in enhancing market efficiency’ (WAM, 11 July 2024)
Ministry of Economy reviews new Competition Regulation law | Emirates News Agency

Federal Decree No 36 of 2023 on the Regulation of Competition (UAE)

Global Legal Insights, ‘Mergers & Acquisitions Laws and Regulations 2025 – UAE’ (Global Legal Insights, July 2025)https://www.globallegalinsights.com/practice-areas/mergers-and-acquisitions-laws-and-regulations/uae/

Hashem Al Ahdal, ‘Merger Control in the UAE: A Legal and Strategic Outlook for 2025’ (BSA Law, September 2025) https://www.bsalaw.com/insight/merger-control-in-the-uae-a-legal-and-strategic-outlook-for-2025/

Morgan Lewis, ‘New UAE Merger Control Thresholds Now Effective’ (Morgan Lewis, June 2025) https://www.morganlewis.com/pubs/2025/06/new-uae-merger-control-thresholds-now-effective

Nora Memeti, 'Mapping the Gulf States within the Global Competition Law Framework' (2024) 8 EU and Comparative Law Issues and Challenges Series 243

Ragini Agarwal, ‘The New UAE Merger Control Thresholds’ (Integrate Law, April 2025)https://integriti.law/the-new-uae-merger-control-thresholds-2/

Thérèse Abou-Zeid et al, ‘Merger Control in the UAE: Key Changes Under the New Competition Framework’ (DLA Piper, February 2025)Merger Control in the UAE: Key Changes Under the New Competition Framework | DLA Piper

White & Case, ‘UAE announces new thresholds for merger filings’ (White & Case, March 2025)https://www.whitecase.com/insight-alert/uae-announces-new-thresholds-merger filings?s=UAE%20Merger%20Control%20Law

White & Case, ‘UAE issues new Competition Law with new merger control regime’ (White & Case, December 2023)https://www.whitecase.com/insight-alert/uae-issues-new-competition-law-new-merger-control-regime?s=UAE%20Merger%20Control%20Law>