10 June 2019
OMAN: New Acquisition and Takeover Law Passed
The Sultanate of Oman’s Capital Market Authority (CMA) has issued a new law, the Takeover and Acquisition Regulation, which applies to the acquisition of more than 25% of Omani-listed companies.
Published in the Official Gazette on 19 May 2019 pursuant to Article 7 of the Capital Market Law, the new regulation aims to manage takeover and acquisition processes in a fair and transparent manner that provides protection for shareholders. It applies to bids that involve more than 25% of shares of public joint stock companies listed on the Muscat Securities Market, or the taking of a controlling stake in a listed company. The law largely defines the terms and parties involved in an acquisition bid, and requirements of key processes, such as official announcements, offer documents, duties of boards of directors, acceptance conditions, and the price, nature and settlement of the consideration.
Article 2 of the new regulation stipulates that it applies to any person or group that acquiring not less than 25% of the voting shares in the target company and intending to acquire 25% or more of its shares; any person or group that acquire 25% of the voting shares in the company, and intend to acquire voting shares at more than 2% every six months from the date of first purchase transaction; and, in the third case, any person or group that acquire 25% of the voting shares in any company that controls the target company, with the intent to acquire voting shares in the company at more than 2% every six months from the date of first purchase transaction. Foreign companies or investment funds listed on Oman exchanges are also included.
The Regulation is a result of the Omani government diversification initiative, part of its economic process known as ‘Tanfeeth’, and forms part of a raft of new legislation that Oman is introducing, including measures to encourage more foreign investment. On 27 May, the draft New Foreign Capital Investment Law, which removes the need for Omani partners for foreign investors, and minimum and maximum investment levels, was approved by Oman’s Shura Council.