A new merger era?

Alexandra Rogers and Faisal Aldhayaan of Norton Rose Fulbright examine what recent reforms to merger control systems in Saudi Arabia and the European Union mean for businesses.

Although the Kingdom of Saudi Arabia (KSA) and the European Union (EU) have developed their merger control systems in very different institutional contexts, both have embarked on significant recalibrations of their regimes in recent years. While their motivations differ, ranging from investment attraction and economic transformation in the KSA to competitiveness and industrial strategy in the EU, both jurisdictions share a common objective: ensuring their regulatory frameworks remain fit for purpose in an increasingly complex global economy.

This article examines how these parallel reform efforts are reshaping merger control and what businesses need to consider alongside other obligations arising under foreign direct investment rules and the EU Foreign Subsidies Regulation.[1]

KEY TAKEAWAYS FOR BUSINESSES

As businesses navigate merger control across the EU and KSA, several practical points deserve attention:

• Keep up with evolving regimes: The KSA is likely to release a sixth iteration of its concentration review guidelines and the EU’s revised merger guidelines are expected by 2027.
• Engage authorities early: As analytical frameworks shift and new theories of harm gain traction, early pre‑notification engagement is becoming a critical risk‑management tool.
• Track enforcement trends, not just rules: The GAC’s first structural remedy and sharper penalties for gun jumping reflect a more assertive enforcement posture; meanwhile, the EU is increasingly proactive on network efforts, dynamic competition harms and supply chain security / strategic markets.
• Lead with an innovation narrative: Both authorities are now probing how transactions affect innovation pipelines, digital ecosystems and market evolution, making credible innovation‑focused arguments essential.
• Plan carefully in strategic sectors: Petrochemicals, energy, telecoms, and financial services face heightened scrutiny, with GAC enforcement increasingly resembling Brussels level intervention for high impact deals.

More broadly, the shifts seen in the last couple of years reflect a wider global debate about the intersection of competition policy, economic development, innovation, and national competitiveness. The direction taken by the EU and KSA will influence not only their own markets but also the thinking of regulators worldwide watching these two evolving merger control systems.

RECENT EVOLUTION

In the KSA, the General Authority for Competition (GAC) released Version 5 of its Economic Concentration Review Guidelines in April 2025, introducing refined notification thresholds, an expanded definition of control, new exemptions for strategic joint ventures, and a one-year validity period for clearance decisions. These changes align with the KSA’s broader Vision 2030 agenda – a national transformation program aiming to diversify the economy and strengthen regulatory certainty. Momentum behind these reforms is strong: the GAC received a record 427 merger notifications in 2025 – rapid growth for a young authority, and its recent assumption of the presidency of the Arab Competition Network underscores its rising regional influence.

The EU underwent a significant institutional shift in December 2024 with the appointment of Teresa Ribera as Competition Commissioner, following Margrethe Vestager’s decade-long tenure. Ribera’s mandate, guided by the 2024 Draghi Report: A Competitiveness Strategy for Europe,[2] places renewed emphasis on modernising EU merger control to support innovation, sustainability, and the emergence of “European Champions.” In line with this strategic direction, the European Commission (EC) launched a comprehensive review of its Horizontal and Non-Horizontal Merger Guidelines in May 2025.[3]

As both systems evolve – the KSA through rapid regulatory refinement as an increasingly assertive authority, and the EU through a more measured shift within a mature and well-established regime – their contrasting approaches highlight different priorities.

THRESHOLDS AND NOTIFICATION REQUIREMENTS

Both jurisdictions rely on turnover-based notification thresholds. In an effort to make the regime more targeted and reduce unnecessary filings, the KSA introduced important refinements to the application of the thresholds. As of April 2025, the KSA regime now requires the target to contribute (even minimally) to the SAR40 million local sales threshold, with as little as SAR1 in KSA turnover being sufficient. This ensures a genuine local nexus for acquisitions, avoiding the previous situation of filings being technically triggered that had no KSA relevance. This is more aligned with international standards, including the EU, where the EU Merger Regulation (EUMR) merger thresholds are designed to capture transactions with sufficient EU economic footprint (the primary and second EUMR turnover tests both focus on EU-wide and Member State turnover).

Both jurisdictions require mandatory pre-merger notification and prohibit closing before clearance. Notifications must be submitted online, with the KSA requiring Arabic translations of official documents. Parties must close within the one-year validity period for GAC clearance decisions, re-notify or seek an extension. This mirrors practice in mature regimes such as the United States, where the validity of merger clearances is inherently time limited to one year and mergers often require refiles if closing is delayed. It contrasts with the EU system, however, where EC merger clearances remain valid indefinitely but may be revoked if they were obtained through incorrect or misleading information or by fraud or deceit.

Both regimes assess control through the concept of decisive influence. In the EU, this principle is founded on Article 3 EUMR and long-standing case law on the rights enabling decisive influence sufficient to establish control (and which can be used to find too early implementation of a transaction – also known as “gun jumping”). The KSA’s 2025 Economic Concentration Review Guidelines (Version 5) explicitly adopt the same analytical framework, defining positive, negative and joint control in a manner aligned with EU standards.

REVIEW PROCESS

The EU operates a structured two-phase merger review system: Phase I, lasting 25 working days, and Phase II, lasting an additional 90 working days, both set out expressly in the EUMR. By contrast, KSA’s GAC applies a single statutory review period of 90 days from acceptance of a complete notification, with the possibility of extensions. As part of its 2025 reforms, the GAC introduced a two-track review framework: Track I (fast track) for straightforward cases and Track II (in depth) for more complex reviews. This is similar to the EU’s two-phase system, though the underlying timelines remain more flexible under the KSA regime. The 2025 reforms also formalised the issuance of “no notification required” certificates for borderline cases, typically delivered within 15 working days. This mechanism has no direct equivalent in the EU, which instead relies on informal pre notification discussions to scope and streamline filings.

APPROACH TO INNOVATION COMPETITION

Both authorities are increasingly focused on the competitive effects of mergers on innovation, a theme that has risen sharply in global merger control. In the EU, innovation is a stated enforcement priority under Teresa Ribera’s mandate. The EC’s May 2025 consultation on the revised EU merger guidelines expressly seeks feedback on dynamic competition analysis and on how to assess reasonably foreseeable future market developments, signalling an intention to formalise innovation effects analysis.

The EC has already demonstrated its willingness to challenge mergers on innovation grounds, most prominently in Illumina/GRAIL,[4] where concerns centred on harm to pipeline innovation. The EC is also actively scrutinising consolidation in AI and other data driven sectors.

In the KSA, the GAC’s guidelines do not yet include dedicated provisions on innovation. Nevertheless, the authority is increasingly applying a forward-looking assessment in technology-oriented transactions, consistent with the ambitions of Vision 2030. Recent notifications in sectors such as fintech, digital platforms, and cloud-based services indicate that the GAC will need to move toward incorporating innovation related considerations, even if its approach remains less formalised than the EU’s for now.

SUBSTANTIVE ASSESSMENT

Market definition is a central step in merger analysis for both authorities. The EU relies on established tools such as demand and supply side substitution analysis and the “SSNIP” – (small but significant and non-transitory increase in price) test to define relevant product and geographic markets. The GAC likewise examines substitutability and competitive constraints but has not formally adopted the SSNIP test. In practice, both authorities then assess market shares, barriers to entry, and countervailing buyer power as part of their substantive review.

Both the EU and the KSA apply a substantial lessening of competition (SLC) benchmark when assessing mergers. Although the EUMR is formally framed around the “significant impediment to effective competition” (SIEC) test, it is substantively equivalent to the SLC standard used internationally.

ENFORCEMENT AND REMEDIES

Both the EU and KSA regimes are actively enforced, albeit at different scales. In February 2024, the GAC imposed gun‑jumping fines of SAR400,000 (approx. EUR90,000) each on two undertakings involved in a notifiable transaction that was implemented without prior clearance. This was the first fine that the GAC publicly announced since 2020 solely for failure to notify (aside from a very low fine imposed on an undisclosed local transaction in 2023). The GAC does not routinely publish information on individual violations but has indicated that it has stepped up procedural enforcement in relation to transactions in recent years. It is known that the GAC monitors the press, deal announcements and activity of other local regulatory authorities to keep tabs on transactions, although the filing form does not request information about prior filings.

EU merger control enforcement has become significantly more assertive in recent years, with the EC treating gun‑jumping as a very serious procedural infringement. Enforcement activity has intensified, illustrated by the EC’s record EUR432 million fine on Illumina for closing its acquisition of GRAIL during an ongoing Phase II investigation, notwithstanding the later annulment on jurisdictional grounds. The EU courts have reinforced the EC’s strict approach including by upholding a decision where the EC decided to impose separate fines for failing to notify and for early implementation, confirming that these are distinct infringements under the EUMR and validating the EC’s broad interpretation of what constitutes premature control.

The EU’s merger control regime relies heavily on remedies as a core tool to address competition concerns, with the EC showing a long‑standing preference for structural divestitures, particularly in Phase I, supported by detailed guidance, rigorous purchaser vetting, and extensive use of independent monitoring trustees to ensure compliance. This approach has become increasingly assertive, with the EC demanding more comprehensive remedy packages and imposing significant procedural fines in recent years. By contrast, the Saudi GAC has historically relied mostly on behavioural commitments, only recently adopting its first structural remedy decision in April 2025, which marked a shift toward a more EU‑style enforcement style. GAC’s remedies practice remains less mature, with far fewer conditional approvals to date and a more incremental evolution toward sophisticated remedy design and implementation.

THIRD-PARTY RIGHTS

In the EU, third‑party rights in merger control are extensive, with the EC granting complainants, customers, competitors, and other stakeholders meaningful opportunities to submit observations, access non‑confidential files, and influence the assessment – particularly in Phase II. By contrast, in the KSA, the GAC provides only limited third‑party rights, offering far narrower avenues for intervention or input, and generally maintaining a less transparent, less participatory process. This reflects a key structural difference between the mature, procedurally elaborate EU system and the still‑developing KSA framework.

Text by:

1. Alexandra Rogers, partner, head of Brussels, Norton Rose Fulbright
2. Faisal Aldhayaan, senior associate, Norton Rose Fulbright

Footnotes:

[1] https://www.nortonrosefulbright.com/en/knowledge/publications/bcb8011d/the-eu-foreign-subsidies-regulation-explained-what-business-should-know

[2] https://commission.europa.eu/document/download/97e481fd-2dc3-412d-be4c-f152a8232961_en?filename=The%20future%20of%20European%20competitiveness%20_%20A%20competitiveness%20strategy%20for%20Europe.pdf

[3] https://connections.nortonrosefulbright.com/post/102kajn/summer-reading-arrived-early-european-commission-aims-for-balancing-act-in-its-r

[4] https://www.nortonrosefulbright.com/en-be/knowledge/publications/a19b2f5a/illumina-wins-at-top-eu-court-the-eu-commission