Before You Close an M&A Deal: Legal Traps to Avoid in 2025

Market Trend: M&A Momentum Across the GCC

As we enter 2025, merger and acquisition activity across the Gulf Cooperation Council (GCC) continues to surge, reflecting the region’s accelerating economic diversification and its emergence as a magnet for global capital. In 2024, M&A volume in the region grew by an estimated 19 percent, driven by government-backed initiatives, cross-border investor interest, and robust sectoral growth in healthcare, education, logistics, and technology.

Governments across the GCC have made it clear that foreign direct investment (FDI) is a strategic pillar. From Saudi Arabia’s Vision 2030 to the UAE’s National Agenda, the focus is on creating competitive, investor-friendly environments. These macroeconomic shifts are generating deal momentum. However, behind the growth narrative lies a more complex layer of legal and regulatory evolution that investors must navigate to succeed.

Data Analysis: A Fragmented but Reforming Regulatory Landscape

One of the defining features of the GCC is that it is not a monolithic regulatory environment. Each country operates under distinct legal systems, approval mechanisms, and foreign ownership rules. While there have been substantial reforms to encourage foreign participation, these are unfolding at different paces across the region.

In the United Arab Emirates, the updated Commercial Companies Law now permits 100 percent foreign ownership across a wide range of sectors. However, exceptions remain in strategic industries such as defense, utilities, and media, where local participation is still required.

Saudi Arabia has made important changes to its Competition Law, including the expansion of mandatory notification thresholds and the introduction of new enforcement mechanisms. The Kingdom is also prioritizing transparency and ESG alignment, which is increasingly being factored into regulatory reviews of proposed acquisitions.

Elsewhere in the region, countries like Oman and Bahrain are streamlining their approval processes and digitalizing documentation to reduce transaction friction. Qatar is gradually aligning with international best practices, particularly in terms of corporate governance and foreign capital protections.

These developments are promising, but they also require investors and acquirers to conduct deep jurisdictional research, adapt deal structures, and seek early engagement with local regulators.

Expert Opinion: Regulatory Navigation as a Strategic Advantage

While financial modeling and commercial due diligence remain critical components of any transaction, legal and regulatory strategy has become a defining factor in deal success within the GCC.

As one expert explains:

“M&A in the GCC is not solely about identifying the right target. It’s about understanding the regulatory framework that underpins each transaction. In 2025, success will favor those who can navigate this landscape effectively and adapt quickly to evolving national priorities.”

This perspective underscores a growing trend: legal advisors are increasingly involved early in the transaction process—not just to assess compliance risks but to structure deals that align with national investment strategies and sectoral imperatives.

In many cases, a clear regulatory pathway and early stakeholder alignment can significantly accelerate deal timelines and enhance certainty for both buyers and sellers.

Forecast: Key Legal Themes to Watch in 2025

Looking ahead, several legal and regulatory trends are expected to shape the GCC M&A landscape:

• Increased Regulatory Scrutiny Competition authorities, particularly in Saudi Arabia and the UAE, are stepping up enforcement and review activities. Transactions with market concentration implications will face closer examination.
• Sector-Specific Restrictions Sectors deemed strategic or sensitive such as healthcare, telecom, energy, and defense may continue to require higher levels of scrutiny and local participation.
• ESG and Disclosure Compliance as ESG standards are integrated into national frameworks, acquirers will need to ensure that targets meet evolving disclosure and governance requirements.
• Digitalization and Efficiency Gains Governments are investing in digital platforms for licensing and approvals, which could streamline processes and reduce bureaucratic delays, especially in the UAE, Bahrain, and OLooking ahead, several legal and regulatory trends are expected to shape the GCC M&A landscape:

• Increased Regulatory Scrutiny Competition authorities, particularly in Saudi Arabia and the UAE, are stepping up enforcement and review activities. Transactions with market concentration implications will face closer examination.
• Sector-Specific Restrictions Sectors deemed strategic or sensitive such as healthcare, telecom, energy, and defense may continue to require higher levels of scrutiny and local participation.
• ESG and Disclosure Compliance as ESG standards are integrated into national frameworks, acquirers will need to ensure that targets meet evolving disclosure and governance requirements.
• Digitalization and Efficiency Gains Governments are investing in digital platforms for licensing and approvals, which could streamline processes and reduce bureaucratic delays, especially in the UAE, Bahrain, and Oman.man.

Investor Takeaway: Legal Foresight Is No Longer Optional

The 2025 M&A environment in the GCC is rich with opportunity but success will require precision. The region’s governments are open for business, but they expect investors to play by the rules, many of which are evolving in real time.

For buyers, this means engaging local legal advisors early and building regulatory risk assessments into deal modeling. For sellers, it means preparing businesses with the right corporate structure, clean ownership history, and sectoral compliance to ensure a smooth due diligence process.

Understanding local nuances is no longer a luxury it is a competitive advantage. As the regulatory environment matures, those who invest in the right guidance and structure their transactions with foresight will be the ones who thrive.