Merger & Acquisition

Mergers And Acquisitions

M&A is a general term refers to corporate strategy that can help an enterprise grow rapidly.

Acquisition is to buy most or all of the target company’s ownership stakes in order to control the target firm, the form of payment is usually in cash. It is easier for the acquired firm to take over an existing company than expanding their own.

It can be friendly or hostile, friendly acquisitions occur when the target firm expresses its agreement to be acquirer, whereas hostile acquisition is when the acquiring firm needs to actively purchase large stakes of the target company in order to have a majority stake.

Merger occurs when a company finds a benefit in combining with other company, to start a new company.

In some rare cases, cash or some other form of payment is used to facilitate the transaction of equity. Usually the most common arrangements are stock-for-stock.

Mergers And Acquisitions In KSA

The Companies Law (Royal Decree No. M/6 1965) governs the merger and acquisition of private companies. While there are no specific takeover regulations applying to private companies, the Ministry of Commerce and Industry (MOCI) has the power to regulate and issue any additional requirements as it deems may be necessary.

In relation to companies listed on the Saudi Stock Exchange (Tadawul), the Capital Market Law (Royal Decree No. M/30 of 2003) establishes the Saudi Arabian Stock Exchange and Saudi Capital Market Authority (CMA). The CMA is responsible for regulating (Tadawul) and public companies.

Based on the financial market system issued by Royal Decree No. M / 30 and the date of 2/6/1424 issued CMA Board Resolution No. 1-50-2007 dated 21/09/1428 H corresponding 3/10/2007 adoption of the list of mergers and acquisitions, it is the primary regulator of listed companies and it’s always involved in mergers of public companies.

This diagram shows the total number of Mergers and Acquisitions that took a place in Saudi...