A merger of UAE companies follows Chapter Two of Part Seven of Federal Decree-Law No. 32 of 2021 on Commercial Companies, Articles 285 to 293. The law sets a short mandatory path: a special resolution, a merger contract, a shareholder vote, notice to creditors, a period for objections, and approval before the registry is updated. This guide explains those steps from the Arabic text of the Decree-Law on the UAE Legislation portal, as updated on 1 October 2025. Article numbers refer to the Decree-Law. We assist clients with the UAE from our office in Kuwait, in cooperation with our partners in the UAE.
What this guide covers, and what it does not
It covers the merger rules in Articles 285 to 293. It does not cover the detailed methods and procedures that Article 285 leaves to a decision of the Minister, or to the board of the Securities and Commodities Authority for public joint stock companies. It also does not cover competition clearance, the rules of a sector regulator, or the Central Bank rules for companies it licenses. A deal may need any of these, so check them before you sign.
The basic rule (Article 285)
A company may merge into another company by a special resolution of its general assembly, or of the body that stands in its place. This is allowed even if the company is in liquidation. As an exception to Articles 199, 200 and 201, the merging companies make the merger by concluding a contract between them.
Two bodies set the detail. The Minister issues the decision that regulates the methods, conditions and procedures of merger for all companies except public joint stock companies. For those, the board of the Authority issues the decision. If a merging company is licensed by the Central Bank, the Central Bank's rules apply as well.
The merger contract (Article 286)
The contract sets out its terms and method of merger. It must state at least:
- the incorporation contract and the articles of association of the absorbing company, or of the new company that results from the merger;
- the name and address of each proposed board member or manager of the absorbing or new company;
- how the shares or stakes of the merged companies convert into shares or stakes in the absorbing or new company.
The vote (Article 287)
The directors or managers of every absorbing and merging company must put the draft merger contract to their general assembly, or the body that stands in its place. Approval needs the majority that the law requires to amend the company's incorporation contract.
The notice calling the assembly must meet two conditions:
- It must come with a copy or a summary of the merger contract.
- The contract must state clearly the right of opposing shareholders. Shareholders who together hold at least 20% of the capital and opposed the merger may challenge it in the competent court within 30 days of the approval.
Holding companies and wholly owned subsidiaries (Article 288)
The law simplifies mergers inside a group:
- A holding company may merge with one or more of its wholly owned companies into one company, without concluding a merger contract. This happens by a special resolution of those companies, passed by the majority required to amend each one's incorporation contract.
- Two or more companies wholly owned by the same holding company may merge into one company, again without a merger contract.
- Where the merged company is a holding company, the merger rules apply to its wholly owned subsidiaries too.
Members who object: withdrawal and value (Article 289)
Except for joint stock companies, members who objected to the merger decision may ask to withdraw from the company and be paid the value of their stakes. They apply in writing to the company within 15 working days of the merger decision.
The value is set by agreement. If the parties disagree, the matter goes to a committee formed for this purpose by the competent authority, before anyone turns to the courts. The committee rule applies to all companies. The part of the value that nobody disputes must be paid to the withdrawing members before the merger procedures are completed and before resorting to the committee over the disputed value.
Creditors: notice and objection (Articles 290 and 291)
Each absorbing or merging company must notify its creditors within 10 working days of the general assembly's approval. The notice must:
- state that the company intends to merge with one or more named companies;
- be sent in writing to each creditor;
- be published in two local daily newspapers issued in the UAE, one of them in Arabic;
- state that any creditor of the companies, any bondholder or sukuk holder and any interested person may object at the company's head office, and that a copy of the objection must be delivered to the Ministry or the Authority, as the case may be. The objection must come within 30 days of the notice.
A creditor who has objected under Article 290 and whose claim is not paid or settled within 30 days of the notice may ask the competent court for an order to stop the merger (Article 291). The court may issue the order if it finds that the merger would unjustly harm the applicant's interests, and it may attach other conditions.
The merger stays suspended until one of three things happens: the objector drops the objection, a final judgment rejects it, or the company pays the debt if it is due or gives sufficient guarantees if it is not yet due. If nobody objects within the Article 290 period, the law treats that as implied approval of the merger decision.
Approval and the registry (Article 292)
The registrar's records are updated only after the Ministry or the Authority, as the case may be, approves the merger decision. The competent authority then annotates the end of the merged company and informs the Ministry or the Authority.
What a merger does (Article 293)
The merger ends the legal personality of the merged company or companies. The absorbing company, or the new company, takes their place in all rights and obligations and becomes their legal successor.
Practical sequence
- Choose the structure and test it against the Minister's or the Authority's merger decision.
- Check competition, sector regulator and Central Bank requirements.
- Draft the merger contract with the content Article 286 lists.
- Call each general assembly with the contract or a summary, and state the 20% members' right to challenge.
- Pass the special resolution by the majority needed to amend the incorporation contract.
- Notify creditors within 10 working days, in writing and in two daily newspapers.
- Deal with withdrawal requests (15 working days) and creditor objections (30 days).
- Obtain the Ministry or Authority approval and update the registry.
Read also: Entering the UAE: Company Forms, Ownership and Free Zones | Mergers and Acquisitions in Egypt: Competition Approval | Bahrain Mergers and Acquisitions: Approval and Takeovers
Frequently asked questions
Which law governs company mergers in the UAE?
Federal Decree-Law No. 32 of 2021 on Commercial Companies, Articles 285 to 293, together with the decisions the Minister and the Authority issue under Article 285.
Can a company in liquidation merge?
Yes. Article 285 allows a merger by special resolution even if the company is in liquidation.
Do minority shareholders have a right to challenge a merger?
Shareholders holding at least 20% of the capital who opposed the merger may challenge it in the competent court within 30 days of the approval (Article 287).
How long do creditors have to object?
30 days from the notice (Article 290). A creditor whose claim stays unpaid after 30 days may ask the court to stop the merger (Article 291).
Does a group merger need a merger contract?
Not where a holding company merges with its wholly owned companies, or where wholly owned companies of one holding company merge with each other (Article 288).
How do you help with UAE mergers?
From our office in Kuwait, in cooperation with our partners in the UAE, we structure the merger, map the approvals and review the documents.