CMA seeks feedback on draft to develop M&A processes in Saudi market

Logo of The Capital Market Authority (CMA)

The Capital Market Authority (CMA) invited market participants and stakeholders to submit their feedback on proposed enhancements to merger and acquisition (M&A) procedures in the Saudi capital market, as part of a 45-day consultation period ending June 11, 2026.

The draft seeks to deepen the capital market and strengthen its role in capital formation, while simplifying M&A execution processes. It also aims to broaden the scope of transactions, support corporate restructuring and partnerships, and improve the competitiveness of mid-sized and growing companies.

The CMA said the proposed framework introduces a “reserve registration mechanism” allowing listed companies to pre-register new shares for future use in acquisitions or asset purchases, either in a single deal or multiple transactions, without requiring additional approvals. The mechanism would be valid for up to three years, with the aim of accelerating execution and reducing procedural requirements.

The proposal includes measures to enhance investor protection in M&A voting, requiring that any shareholder with personal, financial, or commercial interests be included in the quorum at extraordinary general meetings, while being prohibited from voting on related agenda items, though still permitted to vote on other matters.

The draft also sets rules for information sharing during M&A negotiations, allowing limited disclosure to major shareholders under strict conditions, including prior notification to the CMA and a commitment not to trade on the information before its public release, aiming to improve valuation accuracy and reduce risks of market abuse.

It also revises voting rules for shareholders holding stakes in both the bidder and target companies, allowing them to vote in both entities on the transaction, subject to safeguards preventing conflicts of interest.

The CMA expects the proposed changes to improve capital allocation efficiency, enhance market transparency, and increase the attractiveness of the Saudi capital market by strengthening deal execution conditions.