Company merger in Oman: Key legal requirements and procedures

Companies in Oman can merge to bolster growth, efficiency, and financial strength, guided by the Commercial Companies Law issued under Royal Decree 18/2019. This legislation establishes a clear framework for mergers while ensuring the protection of shareholders and creditors.

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the law permits one or more companies to merge with another, even if they are under liquidation, and the merger is completed without following liquidation procedures. A merger may take place between companies of the same or different legal forms.

Dr. Mohammed Ibrahim Al Zadjali, Chairman of Mohammed Ibrahim Law Firm, explained that the law permits various merger scenarios, including between companies undergoing liquidation, and between entities of different legal forms. He detailed two primary forms of merger: incorporation, where one or more companies dissolve and their assets and liabilities transfer to an existing company; and consolidation, where multiple companies dissolve to form a new, single entity absorbing all assets and liabilities.

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the merger agreement must specify the names of the merging companies, sufficient data about them, the resulting entity, share exchange ratios, and distribution terms. It is subject to the approval of the Concerned Body and registration with the Registrar.

Essential to the merger process is a comprehensive agreement outlining the merging companies, the resulting entity, share exchange ratios, and distribution terms. This agreement requires approval from the Concerned Body and registration with the Registrar. Crucially, the merger resolution must be published within 15 days of issuance to remain valid. Creditors affected by the merger have a 30-day window from official notification or publication to file an objection with the Registrar, which suspends the merger proceedings. If a settlement is not reached, legal action can be pursued within 15 days to challenge the resolution. The merger becomes legally effective upon registration, with the surviving or new company automatically assuming all rights and liabilities.

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Creditors whose rights are affected have 30 days from the date of official notification of the merger resolution, or from its publication, to object by filing an objection with the Registrar and providing a copy to the Concerned Body.