Mergers & Acquisitions in Oman: Legal Framework and Deal Process

Quick Overview: M&A in Oman

Mergers and acquisitions in Oman serve as powerful strategic tools for consolidation, diversification, and market entry. Whether domestic consolidation, cross-border acquisitions, or restructuring under a new corporate holding structure, knowledge of Oman’s legal regime ensures compliance and a smoother transition.

Why M&A Is Growing in Oman

Driven by Oman Vision 2040, the Oman Investment Authority (OIA), and sovereign-backed consolidation efforts, companies in sectors such as energy, fintech, utilities, and infrastructure increasingly use M&A to scale and align with national goals.

Legal Framework: Key Laws & Authorities

Critical legal pillars in Oman include:

• Commercial Companies Law (Royal Decree 18/2019), regulating merger, consolidation, and corporate structures

• Competition Protection and Monopoly Prevention Law (Royal Decree 67/2014) and its implementing Ministerial Decision 18/2021, governing merger control

• Capital Market Law, applying to listed entities and takeover thresholds

• Foreign Capital Investment Law, Income Tax Law, and VAT regulations affecting transaction structure

The key regulators are the Ministry of Commerce, Industry & Investment Promotion (MOCIIP), Capital Market Authority (CMA), and sometimes the Oman Investment Authority (OIA) for strategic approvals.

Competition Law & Merger Control Requirements

Under Omani competition law:

• An economic concentration (merger, acquisition, JV, or consolidation) must be notified to the MOCIIP prior to closing 

• Dominance is presumed at over 35% market share or defined by ability to influence price or supply.

• MOCIIP has 90 days to approve, impose conditions, or reject. If no decision is made, approval is deemed granted.

• Penalties for failing to notify include fines (OMR 5k–10k) and up to three years’ imprisonment; non-substantive breaches may reach fines of up to 10% of turnover.

Mergers vs Acquisitions: Legal Structures Available

Omani law allows:

• Merger by incorporation: target dissolves; assets/liabilities transferred; new shares issued

• Merger by consolidation: two or more entities merge into a new entity

• Share or asset acquisition: standard takeover approach, often subject to competition and foreign investment approvals.

Each structure carries implications for liabilities, valuation, and shareholder treatment.

Step‑by‑Step Deal Process in Oman

Step 1: Planning & Strategy
Define strategic objectives, target profiles, sector constraints, and ownership eligibility.

Step 2: Target Selection & Negotiation
Outline terms in an LOI or MOU; consider conditionality around regulatory approvals.

Step 3: Pre‑merger Analysis
Assess if merger control filing or foreign investment licensing is required.

Step 4: Due Diligence
Legal, financial, operational review including licence status, liabilities, litigation, and regulatory compliance.

Step 5: Documentation
Prepare SPA, merger agreements, shareholder resolutions, governance amendments, and valuation reports.

Step 6: Regulatory Filings
Submit merger control filings to MOCIIP; CMA notifications for listed firms; foreign license amendments if required.

Step 7: Closing & Integration
Transfer licenses, restructure boards, integrate operations, and file amendments in the commercial register.

Due Diligence: Key Legal & Financial Checks

Focus areas include:

• Corporate status, ownership structure, encumbrances

• Compliance with licences, regulatory approvals

• Debt obligations, pending litigation, labor exposure

• Tax status, VAT alignment, capital repatriation mechanisms

• Governance, contracts, and strategic fit.

Comprehensive due diligence reduces post-closing risk.

Valuation & Deal Structuring Approaches

Valuation methods used:

• Discounted Cash Flow (DCF)

• Comparable market multiples or precedent transactions

• Adjustments for goodwill, synergies, cross-border tax implications

Deal structure may include share or asset purchases, merger by incorporation or consolidation, depending on tax and operational considerations.

Regulatory Approvals: MOCIIP, CMA & Other Authorities

• MOCIIP handles merger control and economic concentration requests. Mergers resulting in market dominance must gain clearance before closing.

• CMA notifications are required for listed companies when an acquirer reaches a 10% or 25% share threshold.

• Additional sectoral regulators (e.g. Central Bank, telecom authority, energy) may require separate approvals for regulated industries.

Foreign Investment Licensing in M&A Context

Transactions with foreign participation may require modifications under the Foreign Capital Investment Law, such as:

• Maintaining required Omanisation levels

• Updating investment license status post-transaction

• Reviewing sector-specific eligibility rules for foreign ownership (commonly permitted in most sectors)

Domestic planning should address these regulatory requirements.