Navigating the new UAE merger control thresholds

Effective 31 March 2025, the UAE will implement new merger control thresholds, bringing significant changes to its competition law framework. The key change is the introduction of a turnover-based threshold, increasing regulatory oversight of M&A within the UAE. Businesses must assess whether their transactions meet the revised thresholds and ensure compliance to avoid delays, fines or regulatory intervention.

Key changes to the UAE merger control regime

Under the new regime, two primary thresholds will determine whether a transaction requires merger control clearance:

1. Introduction of a turnover-based threshold

A new turnover-based threshold will mean that a filing is required if the combined annual turnover of the merging parties in their relevant market within the UAE exceeds AED300m (approximately USD81.7m) during the last financial year.

This threshold means that high-revenue companies could now face scrutiny even if their transaction does not lead to significant market concentration.

2. Market share threshold remains unchanged

The existing market share threshold continues to apply, requiring a notification if the combined market share of the merging entities exceeds 40% in the relevant market within the UAE.

The inclusion of the turnover threshold expands the scope of transactions requiring clearance, capturing deals that previously would not have been subject to review.

Defining the relevant market

Determining whether a transaction meets the thresholds requires a careful assessment of the relevant market, which consists of two key dimensions.

1. Product market definition

The relevant product market includes all goods or services that are interchangeable or substitutable from a consumer’s perspective. If two businesses produce similar products that customers could switch between, they are considered to be in the same product market. The assessment also considers supply-side substitutability – whether suppliers could easily shift production to compete in the same market.

2. Geographic market definition

The relevant geographic market considers the area where competitive conditions are sufficiently homogenous. Depending on the industry, this could be at the national level or localised to a particular emirate or city. Some markets, particularly in digital services or cross-border trade, may extend beyond the UAE.

Merger notification process and deadlines

If a transaction meets either the turnover or market share threshold, the merging parties must submit a formal notification to the Ministry of Economy (MoE) before closing the transaction. Notifications must be filed at least 90 days before closing, with the MoE conducting an initial review within this period. For more complex cases, the review may be extended by an additional 45 days.

The filing process requires businesses to provide details on the merging parties, financial statements demonstrating turnover, and an analysis of how the transaction will impact competition. Given the potential for regulatory scrutiny, businesses should ensure that they have robust market assessments and financial disclosures in place before filing.

Penalties for non-compliance

Failure to comply with the new merger control regime can lead to significant financial penalties, including:

• fines ranging from 2% to 10% of UAE turnover from the affected market;
• fixed fines between AED500,000 and AED5m if turnover data is unavailable; and
• corrective measures, including the unwinding of completed transactions.

These penalties underscore the importance of conducting early regulatory assessments to ensure compliance and avoid transaction risks.

Impact on businesses and transactions

The introduction of a turnover threshold will substantially increase the number of transactions requiring clearance. Sectors within high revenue but fragmented market structures – such as retail, technology and financial services – will be particularly affected.

The 90+ day review period means businesses will need to integrate merger control assessments earlier in their deal timelines. Any delays in securing clearance could impact transaction valuations, financing arrangements, and closing schedules.