Saudi Capital Market Authority board issued its resolution to approve the updated "Merger and Acquisition Regulations" which will be effective and in full force as of Thursday.
The updated lists aim to regulate the mergers and acquisitions and make the capital market environment more stable and in accordance with the national transformation program and Vision 2030.
The purpose of these regulations is to regulate acquisitions activities, based on the Authority’s powers as stated in the Capital Market Law and merger activities, based on the Authority’s powers.
In light of that, the list included a number of clarifications about the entities that apply to the regulations including: any person who deals in the exchange, including (without limitation) issuers, shareholders, authorized persons, and any person involved directly or indirectly in participating or giving an advice on any transaction amended by these Regulations, directors of companies which are subject to these Regulations, and any person who seeks the acquisition of, or increase shares in, any company subject to this regulation.
The list also included a regulation concerning deals to sell, dispose of or acquire, or agree to sell, assets of a value equal to 10% of the net asset of the Offeree Company according to the latest reviewed interim financial statements or audited annual financial statements, whichever is later, whether through a transaction or various transactions, buy-back of offeree company’s shares, or enter into contracts otherwise than in the ordinary course of business.
Regarding market safety and protection of contributors, the updated version apply to any person, individually or acting in concert with the others, and thus becomes the owner of 40% of the shares carrying voting rights in the offeree company.
Any person obtaining shares, or have control over them, by a deal or number of deals, in owned or controlled shares, or which is controlled by persons acting in concert with it, that represent 40% or more of a specific class of shares that carry voting rights, may not have control over its shares during the following 6 months of obtaining such percentage without the Authority's approval and in accordance with the conditions it specifies
Any person obtaining shares by a deal or number of deals that represent 40% or more of shares that carry voting rights of a listed company, shall disclose to the public the following information: the ownership details of such person and persons acting in concert with it, before and after the transaction, purchase method and the price for share, parties of the purchase, purpose of such purchase and the future plans for the offeree company's activity, shareholders and employees resulting from the purchase.