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Mergers and Acquisitions in UAE

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    The UAE has become a business setting of the highest quality in the world with opportunities in the markets for expansion, diversification, and investment. Mergers & acquisitions (M&A) are now an essential tool in the hands of enterprises which desire to boost their market share, go into new sectors or get access to new technologies.

    At Vigor Accounting & Taxation, we provide services for mergers and acquisitions that are inclusive of assisting companies with the complicated nature of mergers and acquisitions while at the same time maximizing the value for shareholders. This article discusses a detailed analysis of mergers and acquisitions in the UAE, highlighting the main aspects, regulatory framework, challenges, and the customized services offered by Vigor Accounting & Taxation.

    What are Mergers and Acquisitions?

    Mergers and acquisitions are two closely related but different business strategies:

    • Mergers are the joint operations of two companies that become one, typically one goes out of business with its assets being absorbed by the other.

    • Acquisitions are the moments when one company buys another, taking over its assets, operations, and people, while the acquired company continues to be a separate legal entity or merges fully with the acquirer.

    Both strategies come with many advantages such as growth in the market, the entrance to new technologies, product or service diversification, and the overall improvement of the operational efficiency.

    Importance of Mergers and Acquisitions in the UAE

    UAE’s business environment reflects its strategic location, favourable tax policies and a thriving economy. Indeed, many M&A activities are highly necessary in this region for various reasons:

    01
    Market Expansion Through mergers and acquisitions, companies can get the opportunity to enter new markets, both locally and internationally. In the UAE, companies can M&A to access the Middle East, Africa, and Asia markets that are very promising and also increase their customer base and geographical reach.
    02
    Diversification M&A in the UAE is trains of companies to diversify the portfolios, hence decreasing the risk associated with economic downturns or marketing saturation. Through its acquisition of companies in different areas, businesses are able to decrease the risks and at the same time gain more revenue streams.
    03
    Access to Technology and Expertise Technology along with expertise is necessary for the companies in the UAE market to stay ahead of the competition with the constant evolution of the UAE market. M&A gives firms the opportunity to access organizations that hold important patents and innovations, possess cutting-edge systems, or have domain expertise.
    04
    Increased Market Share This merger and acquisitions allows the firms to come together in terms of their resources, infrastructure, and customer base to be positioned as the industry leaders. Such companies are exactly in this case, particularly in the UAE because the sectors such as real estate, finance, and technology are very competitive.

    The UAE has a very well-defined legal structure for the mergers and acquisitions of businesses.

    The key regulations and authorities overseeing M&A activities include:

    01
    UAE Commercial
    Companies Law (CCL) The UAE Commercial Companies Law means the main legal framework that governs the entire process from the steps of mergers and acquisitions until the final detailed strategy is made, that is, it involves the techniques for mergers, including shareholder approvals, notification to creditors, and regulatory filings. Both private and public companies are subject to the provisions of the CCL.
    02
    Securities and Commodities Authority (SCA)
    Public companies listed on the Dubai Financial Market (DFM) or the Abu Dhabi Securities Exchange (ADX) are regulated by the Securities and Commodities Authority (SCA). The SCA has specific requirements for mergers, including disclosure obligations, board approvals, and ensuring transparency throughout the process.
    03
    Competition Law
    the Competition Law in the UAE guarantees that M&A transactions do not lead to unfair monopolies or restrictive practices that might be detrimental to consumers or the market. Companies that are making mergers or acquisitions that are likely to affect the competition of the market drastically need to seek approval from the authorities concerned.
    04
    Foreign Direct Investment (FDI)
    Law The FDI Law is one of the reasons foreign investors may opt for higher percentages of ownership in certain sectors, which would subsequently impact M&A transactions that involve international entities. Getting a knack of the foreign ownership rules is the primary step towards the process of international M&A deal structuring.
    05
    Free Zone Regulations
    Companies operating in UAE free zones are not only bound by various laws and regulations governing the mergers and acquisitions; in most of the cases, but the owners of the zone will also have their own rules for selling shares, owning assets and making managerial decisions.
    M&A

    Services Offered by Vigor Accounting & Taxation

    At Vigor Accounting & Taxation, we deliver complete M&A services that help to simplify the complicated transactions and ensure that our clients experience the success they desire.

    The list of M&A services we provide are stated below

    Due Diligence icon

    Due Diligence

    Due Diligence is one of the main things to remember when you are doing an M&A deal. We execute a thorough screening of the target company’s balance sheet, legal standing, assets, liabilities, and operational structure to detect any possible risks and opportunities.
    Financial Credibility icon

    Valuation Services

    Finding the exact value of the buy-side company is very crucial for successful negotiations. We present well-timed valuations with the consideration of the market conditions, financial performance, growth outlooks, intangible assets, and so on. We will assure you that your valuations are authentic so you will be able to get the right price and fair delivery terms for your purchases.
    Transaction Structuring icon

    Transaction Structuring

    Without an expertly structured arrangement, the net worth which could be delivered and the risks could be reduced are the imperative prospects of the effective deal formation. Our team is responsible for making the best design of a deal in the form either a stock buy, asset buying or Hire Purchase. We also address tax implications, regulatory requirements, and strategic goals to create a deal that perfectly aligns with our customers’ unique needs.
    Negotiation icon

    Negotiation and Advisory

    With vast knowledge of the UAE M&A deals and different types of projects, our staff gives clients concrete strategic and advisory support that they can rely on to achieve maximum profits. We act on your behalf during negotiations, securing favourable terms, and collaborating with the rest of the parties involved.
    Regulatory Compliance and Filings icon

    Regulatory Compliance and Filings

    Achieving adherence to UAE laws and the regulations have become a critical factor and the base aspect of the success of any M&A deal. We handle all formal registrations, report to regulatory bodies, and ensure compliance with standards set by entities such as the SCA, Ministry of Economy, and free zone authorities.
    Post-Merger Integration icon

    Post-Merger Integration

    The sum of a purchase or a merger’s financial success does not set there because the transaction concludes. Post-merger integrity is the principal factor of a successful acquisition and the development of cascaded effects of the efficiencies which come out as benefits. We ease financial integration, operation facilities, and the corporate culture to the client, whose provision results have been very positive.

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