UAE announces the Turnover Thresholds for Merger Filings

The UAE is now on the cusp of a major shift in its merger regime with the recent issuance of the Ministerial Decree No. 3 of 2025 announcing the details of the turnover thresholds (the “Turnover Decision”) which enters into force on March 31, 2025.

The UAE generated a lot of interest when it announced back in November 2023 the issuance of its revamped competition regime which included an overhaul of its merger control regime. Federal Decree-Law No. 36/2023 (the “New UAE Competition Law”) introduced major changes to merger filings, particularly with the introduction of turnover thresholds.

Turnover Decision

Under the Turnover Decision. a filing is required if either of the following thresholds are met:

• 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 (approximately USD 81.6 million); or
• 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.

Economic Concentration (as defined under the New UAE Competition Law) is defined as any action that leads to the full or partial transfer (merger or acquisition) of ownership or usage rights in properties, rights, stocks, shares, or obligations of an establishment to another,” and which results in the “direct or indirect control” over the establishment.

Relevant Market is defined (under the New UAE Competition Law) based on:

• The “Relevant Product Market,” is comprised of products or services that, by virtue of their price, characteristics, and intended use, are considered interchangeable to meet a particular need of the consumer; and
• The “Relevant Geographic Market,” which constitutes the physical or digital place where supply and demand for products or services converge, and where competition conditions are similar or homogeneous.

A preliminary reaction is that the thresholds should focus primarily on transactions that have a discernable local nexus to the UAE. The language of the Turnover Decision suggests that the thresholds apply to the parties’ total sales in the “relevant market” in the UAE (and not their total sales regardless of the relevant market). How the “relevant market in the UAE” is interpreted will need to be assessed. For instance, if the relevant geographic market is assessed global in scope, then it could be considered as the relevant market and potentially impact the UAE.

All in all, it will remain to seen how the various interpretations and analysis of relevant market definition would be adopted in practice.

In the meantime, the much-anticipated new implementing regulations (the “Implementing Regulations”) are set for its 2025 release. 

Now that the Turnover Decision has been issued, all eyes will be on the Implementing Regulations in the UAE.

Implementing Regulations

The Implementing Regulations are anticipated to address several important topics. These topics will include filing fees, and other procedural aspects. However, there are additional critical issues that require further clarification, either within these decisions or through separate guidelines.

These issues include:

• Extent of government exemptions: Clarification is needed on the status of exemptions for companies that are only partially owned by the government.

• Reasonable Filing Fees: filing fees should not be prohibitively high.
• Easing Legalization Requirements for Supporting Documents: Given the costs and timelines associated with rigorous legalization processes, it is important to determine whether these requirements will be eased.
• Fast-Track Procedure: Clarification on whether a fast-track process will be available is essential.
• Guidelines and Definitions
  • Definition of “Control”: Specific guidelines on what constitutes control are necessary.
  • Minority Shareholdings: A clear position on the treatment of minority shareholdings is required.
  • Local Carve-Outs / Hold-Separate Agreements: It is important to address the position on local carve-outs and hold-separate agreements.
  • Guidance on Joint Ventures: Separate guidance on joint ventures, such as the distinction between full-function and non-full-function joint ventures, is needed.

This is a developing story, so stay tuned for further updates and detailed reporting.