ASAR – Mergers & Acquisitions in Kuwait Still Strong in Response to Lucrative Market Opportunities

Ezekiel Tuma: “So far this year, no particular sector has stood out as performing especially well, but there is sufficient confidence in various sectors to see high-value deals completed with relative regularity”

ASAR – Al Ruwayeh & Partners (ASAR), Kuwait’s leading and most prominent corporate law firm, and one of the region’s top tier firms states that mergers and acquisitions (M&A), if well-orchestrated, represent one of the most significant means for companies to achieve scale, harness synergies, develop capabilities or enter new geographies, as well as achieve new corporate growth objectives.

Ezekiel Tuma, Partner at ASAR said: “So far this year, no particular sector has stood out as performing especially well, but there is sufficient confidence in various sectors to see high-value deals completed with relative regularity. For instance, our firm is presently engaged in M&A transactions involving entities in the manufacturing, retail and construction sectors. Given the improving but still fragile economic conditions, this should be regarded as quite an achievement. The current state of events is quite distinct from what we observed in 2012, where most of the M&A activity was in the services sector.

Tuma added that: “We have also noted that potential acquirers appear to be avoiding acquisitions of listed companies. According to feedback we have received, this is largely attributable to the Capital Market Authority Laws and Regulations which require that a person acquiring 30% or more of a listed company’s shares extends the offer to all shareholders to acquire the remaining shares of such company. In due course as the market becomes more accustomed to takeover procedures and processes, and as the economic conditions continue to improve, the current trend will likely change.”

Tuma further observed that: “Other developments of note with respect to M&A include the New Companies Law of 2012 (as amended) which is already influencing the structures of ongoing transactions. We are also watching developments regarding the Protection of Competition Law of 2007, given the appointment of board members of the Competition Protection Agency. Under the Protection of Competition Law and Regulations, entities engaged in M&A transactions that lead to controlling or increasing existing control of market share will require the approval of the Competition Protection Agency.”

ASAR has been at the forefront of M&A deals across Kuwait, in which the firm has advised on an impressive number of transactions. These include advising Automak Automotive with regard to the subscription for its shares by a leading private equity fund, and acting for Fairfax Middle East Holdings in its acquisition of a 39.2% stake of a leading listed insurance company. ASAR is presently engaged in several M&A transactions including a substantial merger and acquisition deals involving entities in the retail, manufacturing, finance and construction sectors.

With dedicated offices in Kuwait and Bahrain, coupled with its associated offices and relationships, ASAR provides clients across an extensive range of industry sectors with comprehensive legal advice and support for their business activities in Kuwait, across the GCC, and beyond.

ASAR has been consistently rated as the leading corporate and commercial law firm in Kuwait by many of the world’s leading and reputable legal guides such as the Chambers Global Guide, International Financial Law Review, and the Legal 500. In 2012, ASAR was named as the “Best Law Firm in Kuwait 2012” by the International Financial Law Review (IFLR), the market-leading guide for financial law firms worldwide. The firm also won the “Best Equity Deal in the Middle East” award by IFLR during the same year.