Mergers & Acquisitions Lawyers
We run acquisition transactions from due diligence through closing and integration.
Overview
Acquisitions rarely fail on price; they fail on what was not examined beforehand. Unsettled employment liabilities, pending zakat and tax exposure, contracts carrying change-of-control clauses, and non-transferable licences — those are the items that surface after closing and change what the deal was actually worth.
We act for either side: due diligence, structuring the deal as a share or asset purchase, the letter of intent and NDA, then the sale and purchase agreement with its representations, warranties and price adjustment mechanics, and finally closing, registration and post-closing obligations.
The structuring decision comes before everything else: a share purchase takes the entity with its entire history and liabilities, while an asset purchase selects what is bought but may lose licences and contracts tied to the entity. The choice has direct zakat, tax and risk consequences, and is settled before the letter of intent rather than after.
The legal framework
M&A transactions intersect with several regimes, and sequencing the approvals is part of the planning:
- The Companies Law on share transfers, mergers and ownership changes
- The General Authority for Competition and economic concentration notifications
- The investment authority where foreign ownership enters or exits
- The Zakat, Tax and Customs Authority on liabilities that travel with the entity
- The Capital Market Authority where a party is a listed company
- The Labour Law on the effect of a transfer on employees
Situations we handle
Buying shares in an existing company
The entity transfers with its full history. Diligence here is not a luxury; it is how you learn what you are buying.
Buying assets or a specific business line
Allows you to select assets and leave liabilities, but may require re-issuing licences or renewing contracts with counterparties.
A minority investment
Protection lies in minority rights: reserved matters, information rights and future exit terms.
Merging two entities
Requires careful sequencing of approvals, liabilities, employees and licences before any step is executed.
A founder or investor exit
Valuation mechanics, payment schedule and non-compete restrictions determine how clean the exit is and how litigated it becomes.
Costly mistakes we see
- 1
Signing a loose letter of intent
LOIs are drafted in haste and argued about later. State expressly what is binding and what is not.
- 2
Diligence limited to the financials
Accounts do not reveal a change-of-control clause, a live employment dispute, or a licence about to expire.
- 3
Ignoring change-of-control provisions
Customer and supplier contracts may let the counterparty terminate on a change of ownership, stripping out the value the deal was built on.
- 4
Leaving post-closing obligations unsecured
Representations and warranties without a holdback or counter-security remain promises that are difficult to enforce after closing.
How the procedure runs, step by step
Acquisitions are won or lost in due diligence. The Companies Law and the Competition Law define what is permitted and what needs clearance before closing.
- 1
Letter of intent and confidentiality
We draft an LOI fixing the indicative price, exclusivity period and confidentiality undertaking, marking clearly what binds and what does not. Ambiguity here creates a dispute before the deal even starts.
- 2
Due diligence
We examine ownership, contracts, workforce, zakat and tax exposure, licences and pending litigation. Off-balance-sheet liabilities are what reduce the price or kill the deal.
- 3
Structure the transaction
Share purchase or asset purchase? The first carries liabilities across; the second leaves them with the seller but complicates licence transfers. The decision is tax, legal and operational at once.
- 4
Regulatory clearances
The deal may require notification to the General Authority for Competition where economic concentration thresholds are met, plus MISA or sector regulator approval. Closing before clearance exposes the deal to annulment and fines.
- 5
Sale agreement and closing
We draft the representations and warranties, the liability cap, the claim period, and a holdback against liabilities discovered later. Closing then executes and the official registers are updated.
Documents we will ask you for
- Audited financial statements for three years
- The constitution and shareholders’ register
- A schedule of material contracts and licences
- A statement of zakat and tax position
- A list of pending claims and litigation
- The ownership structure and any pledges over shares
Fees and timelines
We price transactions in clear stages: due diligence with a defined scope, then transaction documents, then closing and post-closing. That lets a client stop after diligence if it surfaces something material, without committing to the cost of later stages.
On timing: diligence usually takes two to six weeks depending on the size of the target and the quality of its records. Negotiating the documents takes three weeks to two months. Regulatory approvals add time set by the authorities involved.
Common questions
What is the difference between a share and an asset purchase?
A share purchase transfers the entity with all its rights, liabilities and history, including what has not yet been discovered. An asset purchase selects what is bought and leaves the rest, but can lose licences and contracts tied to the entity and needs third-party consents.
How long does due diligence take?
Usually two to six weeks. The decisive factor is not the size of the target but the quality of its records: an organised company is reviewed in a fortnight, one with incomplete records can take two months.
Does the deal need competition approval?
An economic concentration notification may be required where the thresholds are met. Checking early matters, because closing before obtaining a required clearance exposes the parties to a breach.
What are representations and warranties?
Written statements by the seller about the state of the company: ownership, liabilities, disputes, compliance. If untrue they give rise to an indemnity claim, which is why their scope, cap and duration are negotiated carefully.
How do we protect against hidden liabilities?
Three tools: diligence that is not limited to the financials, specific representations and warranties, and a holdback or security for a defined period after closing, released when no claims have emerged.
Do employees transfer automatically?
In a share purchase the employment relationship continues with the same entity. In an asset purchase it requires express arrangements to transfer contracts and end-of-service entitlements — a point routinely forgotten until after closing.
When do we sign the letter of intent?
After agreeing the headline terms and before diligence. What matters is that it states clearly what binds — confidentiality, exclusivity, duration — and what does not, such as the indicative price.
Do you insist on diligence before signing?
We always advise it and will not recommend signing without it. If a client insists on moving quickly, we record our reservation in writing and add extra contractual protection through the warranties and a price holdback.
Related services
Due Diligence Lawyers
We produce legal due diligence reports that surface risk before a transaction closes.
Corporate Lawyers
We support companies across the Kingdom from incorporation through day-to-day governance, including ownership structures, shareholder decisions and reorganisations.
Competition & Antitrust Lawyers
We advise on economic concentration filings and restrictive practice risk.