Article 7 of the Saudi Competition Law
المادة 7 من نظام المنافسة
The article requires establishments wishing to carry out an economic concentration to notify the Authority at least 90 days before completing it if their annual sales exceed an amount set by the Regulations.
Official text (Arabic)
This article has not been amended since the law was issued.
يجب على المنشآت الراغبة في المشاركة في عملية التركز الاقتصادي إبلاغ الهيئة قبل (تسعين) يوماً على الأقل من إتمامها إن تجاوز إجمالي قيمة المبيعات السنوية للمنشآت الراغبة في المشاركة في التركز الاقتصادي مبلغاً تحدده اللائحة.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 7 explained in plain English
This article regulates the duty to notify of an economic concentration. Under Article 1, economic concentration is any action that transfers the ownership of assets, rights, shares, stakes or obligations of one establishment to another in whole or in part, or that combines two or more managements under a joint management, according to the controls in the Regulations; this usually includes mergers and acquisitions.
The elements of the rule:
- Who is bound: establishments wishing to take part in an economic concentration.
- What: notifying the General Authority for Competition.
- When: at least 90 days before completing the transaction.
- Condition for the duty: that the total value of the annual sales of the participating establishments exceeds an amount determined by the Regulations. The Law did not set the figure, but referred it to the Implementing Regulations.
Note that notification is required before completion, not after, and that the 90-day period is a minimum ("at least"), so notifying earlier is permitted. Connected to this article is Article 8, which allows the Board, based on the recommendation of a technical committee, to exempt an establishment from this article if that leads to an improvement in the performance of the market or of establishments and achieves a benefit to the consumer that outweighs the effects of limiting competition, according to the controls in the Regulations. Article 6 deals with something different: abuse of a dominant position.
Before any large merger or acquisition deal, it is advisable to consult a lawyer specialized in competition and commercial cases to verify whether notification is required.
Practical example
A food distribution company in Riyadh plans to acquire most of the shares of a competing company in the Eastern Province, and their combined annual sales exceed the amount determined by the Regulations. They must notify the General Authority for Competition at least 90 days before completing the deal.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 7 of the Saudi Competition Law
When must the competition authority be notified of a merger or acquisition?
At least 90 days before completing the economic concentration, if the total value of the annual sales of the participating establishments exceeds an amount determined by the Regulations.
What is the financial threshold that requires notification of an economic concentration?
The Law does not specify it; it provides that it is an amount determined by the Implementing Regulations.
Can the duty to notify be waived?
Article 8 allows the Board, based on the recommendation of a technical committee, to exempt an establishment from this article if the conditions for exemption are met and according to the controls in the Regulations.
Articles this article refers to
More articles on Economic Concentration and Merger
- Article 8
The article allows the Board, on a technical committee's recommendation, to exempt an establishment from Articles 5, 6 and 7 if this improves the performance of the market or establishments and gives consumers a benefit that outweighs the restriction of competition.
يجوز للمجلس -بناء على توصية من لجنة فنية يشكلها لهذا الغرض- الموافقة على طلب المنشأة إعفاءها من أي حكم من أحكام المواد (الخامسة) و(السادسة) و(السابعة) من النظام
- Article 9
The article refers the procedures, content and documents for notifying an economic concentration to the Regulations, and gives the Authority the right to inspect and copy the records of the establishments concerned.
1- تحدد اللائحة الإجراءات الواجب اتباعها للإبلاغ عن التركز الاقتصادي، بما في ذلك محتواه والمعلومات والمستندات المطلوبة. 2- للهيئة الاطلاع على جميع السجلات والبي
- Article 10
The article provides that the Board's decision on economic concentration notifications is approval, conditional approval or rejection, with reasons required for conditional approval and rejection decisions.
يصدر المجلس قراراً في شأن بلاغات التركز الاقتصادي بأحد الأشكال الآتية: 1- الموافقة. 2- الموافقة المشروطة. 3- الرفض. ويتعين أن يكون القرار الصادر بالموافقة المشر
- Article 11
The article bars establishments required to notify from completing an economic concentration except with the Authority's written approval or after 90 days from notification pass without being told of approval or rejection.
لا يجوز للمنشآت المشار إليها في المادة (السابعة) من النظام استكمال إجراءات التركز الاقتصادي إلا في الحالات الآتية: 1- إذا أبلغتها الهيئة كتابة بالموافقة. 2- إذا
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.