Qatar is a country characterized by a highly developed economy, a stable political system and high standards of living. Therefore, foreign businessmen are often interested in conducting M&A transactions in Qatar. Today we will look into the main aspects of regulating M&A in the Middle East.
Legal Requirements for M&A Deals in the State of Qatar
Under applicable legislation, Qatar-registered companies can conclude M&A deals as per the CCA.
Public companies in the state of Qatar must be registered by 5 founders within a 60-day term following registration. After that they are to offer their shares through a publicly held IPO.
JSCs are forbidden from engaging in privately held sales, as this will violate their obligations before the stakeholders. Public JSCs may dispose of or purchase stocks, as well as engage in mergers or acquisitions of other companies by means of privately made offers.
Companies whose stocks traded on the Qatar Stock Exchange can be disposed of and purchased by any individual (or a group of individuals) who applied for and obtained registration with relevant Qatari authorities. Open PLCs may also dispose of or purchase shares, as well as conduct M&A deals by means of privately held offerings.
PLCs in the state of Qatar are divided into 2 categories
- public JSCs
- funds engaged in investment activities
Under the CCA, JSCs are allowed to conclude M&A deals. Pursuant to Qatari legislation, acquiring businesses can be done through concluding an M&A deal.
Merging is the process of combining two or more objects into one object. Qatari merger legislation complies with relevant articles of the CCA.
Concluding an M&A deal requires:
- issuing a decision on dissolvement
- evaluation of assets as per relevant laws
- publication of a decision on concluding an M&A deal
- distributing capital between shareholders proportionate to their stakes
- running a notification of an M&A deal in 2 locally published newspapers
- publishing information on an M&A deal on the web resource of the company initiating the takeover
M&A in Qatar
Merging or acquiring a Qatar-based company requires the following documents:
- preliminary M&A agreement
- modified charter of the company that initiated an M&A deal
- revised association memorandum of the company initiating an M&A deal or a newly created company;
- an final M&A agreement
- a proposal memorandum to be provided to all stakeholders.
Fees involved in M&A deals are fairly nominal. However, separate fees stemming from preparing relevant documentation may be charged.
Legislation Regulating Information Disclosure in Qatar
Requirements for disclosing information may vary and depend on the type of an M&A deal. Here are some mandatory requirements that apply to any M&A deal concluded in the state of Qatar:
- all information pertaining the M&A deal is to be provided to all interested shareholders in a timely manner
- all merger-related info is deemed highly confidential
- parties that have access to the said information are to make sure that it is not leaked in any way
The government of Qatar holds a substantial stake in a large number of PLCs listed on the QSE.Therefore, it can exercise significant control over M&A deals. Two organizations - QCB and QFMA - are legally allowed to request any documents and information related to M&A deal.
They are also allowed to terminate any M&A deal.
Legal Advice on M&A in the State of Qatar
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