Saudi Competition Authority Grants Conditional Approval for Zoujaj-SAGCO Merger
On February 2, 2024, the Saudi General Authority for Competition (GAC) conditionally approved National Glass Industries Company (Zoujaj)’s acquisition of 100% of Saudi Arabian Glass Company (SAGCO). The approval comes with several commitments aimed at maintaining market competition.
Key Conditions for Approval:
🔹 Price Control:
- Zoujaj and SAGCO must not increase average annual sales prices by more than 10% above either the Consumer Price Index or their own cost measures, whichever is higher.
- Any increase beyond this threshold must be justified and approved by GAC.
🔹 Quality Assurance:
- The merged entity must maintain quality standards and regularly submit updated certification documents for five years.
🔹 Contractual Restrictions:
- The companies are prohibited from entering into exclusive or long-term agreements (beyond one year) with customers.
- They must provide copies of customer contracts to GAC upon request.
🔹 Market Access:
- Customers must have full freedom to choose between Zoujaj and SAGCO products without restrictions.
🔹 Regulatory Compliance:
- Zoujaj must participate in a competition compliance program and obtain certification from GAC.
🔹 Annual Reporting:
- Zoujaj must submit yearly reports to GAC on its compliance with these commitments.
🔹 Approval Validity:
Non-compliance could lead to penalties under Saudi competition law.
The approval is valid for one year. If the transaction is not completed within this period, a new application will be required.
GAC reserves the right to amend or revoke conditions based on market circumstances.
