What Should You Look for When Choosing an M&A Advisory Team in the UAE?

Legal Counsel and Financial Advisory — Two Roles, Not One

A common source of confusion in UAE mergers and acquisitions is treating M&A as a purely legal exercise. In practice, a well-structured M&A transaction involves two distinct professional teams working in parallel: legal counsel, who handles the contractual, regulatory, and corporate law dimensions of the deal, and a financial advisory team, who manages the commercial analysis, valuation, due diligence, deal structuring, and negotiation support. Both roles are essential — but they are genuinely different, and the professionals performing them have different qualifications, different outputs, and different perspectives on the transaction.

Farahat & Co. provides M&A financial advisory, transaction advisory, due diligence, valuation, and deal structuring services — not legal representation. This article explains what to look for when building the advisory team for a UAE M&A transaction, covering both the financial and the legal dimensions.

What a UAE M&A Transaction Actually Involves

Mergers and acquisitions in the UAE involve a structured sequence of activities that span months from initial preparation to deal completion. Understanding what this process involves is the starting point for knowing what advisory expertise the transaction requires.

• Business preparation and pre-sale assessment — identifying and addressing issues in the target business before a sale process begins, ensuring the business is positioned for maximum value and minimum deal risk
• Valuation — determining the fair market value of the business using appropriate methodologies (discounted cash flow, comparable transactions, earnings multiples) to establish a credible price expectation
• Due diligence — the buyer’s structured investigation of the target across financial, tax, legal, commercial, and operational dimensions before committing to an acquisition
• Deal structuring — determining how the transaction is structured (share purchase, asset purchase, merger, or a combination), how consideration is paid, and how risk is allocated between buyer and seller
• Negotiation — reaching agreement on price, deal terms, representations and warranties, indemnities, and conditions to closing
• Regulatory approvals — where the transaction requires approval from the UAE Ministry of Economy, the Securities and Commodities Authority, competition authorities, or sector-specific regulators, managing that process to close
• Documentation and closing — executing the Sale and Purchase Agreement and all ancillary documents, completing closing conditions, and transferring ownership

Choosing the Right Financial Advisory Team

The financial advisory team — M&A advisers, transaction advisers, and due diligence specialists — handles the commercial and financial architecture of the deal. Here is what to assess when selecting this team:

Transaction Experience in Comparable Deals

The most useful measure of an M&A financial adviser’s capability is not years in practice but direct transaction experience — specifically in deals of comparable size, industry, and complexity to yours. Key questions to ask include:

• How many transactions has the team completed in the last three years, and in what size range?
• Does the team have specific experience in the industry the target operates in? Sector knowledge is particularly important in regulated industries — healthcare, financial services, real estate, and energy all carry UAE regulatory requirements that affect how M&A transactions are structured
• Has the team advised on both buy-side and sell-side transactions, or predominantly one? A team with experience on both sides understands how counterparties think and negotiate
• Can the team provide references from recent comparable transactions?

Full-Transaction Coverage

The financial advisory team should be capable of covering the full transaction lifecycle — not just the initial valuation or the due diligence in isolation. A fragmented approach, where different advisers handle different phases without continuity, creates gaps in institutional knowledge about the deal and increases the risk that something identified early is not properly carried through to deal documentation. Assess whether the team will:

• Conduct and coordinate the financial and tax due diligence process
• Prepare or review the financial model and valuation analysis
• Provide deal structuring advice — particularly around the Corporate Tax implications of a share purchase versus an asset purchase under Federal Decree-Law No. 47 of 2022
• Support negotiations by providing financial analysis on price adjustment mechanisms, earnouts, working capital targets, and net debt definitions
• Remain engaged through to completion rather than exiting after the due diligence phase

UAE-Specific Regulatory Knowledge

M&A transactions in the UAE require advisers with current, specific knowledge of the UAE regulatory environment — not generic international M&A experience that assumes a different legal and tax framework. Particularly important areas include:

• Corporate Tax due diligence — identifying the target’s Corporate Tax history, any undisclosed FTA liabilities, transfer pricing exposure, and whether claimed QFZP status is properly supported and maintainable post-acquisition
• Free zone transfer restrictions — many UAE free zones impose restrictions on ownership transfers and require authority consent before a share transfer can occur; failure to obtain consent can invalidate the transaction
• Foreign ownership rules — while the 2021 amendments to the Commercial Companies Law significantly expanded foreign ownership rights in mainland companies, sector-specific restrictions remain in several regulated industries
• Competition law — Federal Law No. 4 of 2012 on Competition, and its 2023 amendments, requires notification of transactions exceeding specified market share thresholds; understanding whether notification is required is part of transaction planning

Conflict of Interest Management

An adviser cannot effectively represent both the buyer and the seller in the same transaction. Before engaging any M&A financial adviser, confirm that they are not currently advising, or have not recently advised, the counterparty in the same transaction. The adviser’s first obligation is to their client’s interests — any relationship with the other side of the deal must be declared and resolved before the engagement begins.

Choosing the Right Legal Counsel for an M&A Transaction

Legal counsel handles the contractual and corporate law dimensions of the deal — drafting and negotiating the Sale and Purchase Agreement, advising on representations and warranties, managing regulatory filings, and ensuring the transaction is properly executed under UAE law. Key factors for selecting M&A legal counsel include:

Relevant Transaction Experience

M&A legal work is a specialist area. A law firm’s general corporate or commercial experience does not automatically translate into M&A transaction competence — which requires familiarity with deal mechanics, warranty and indemnity negotiation, cross-border transaction structuring, and the specific approval processes of UAE regulators. Ask for evidence of comparable recent transactions, not just a general corporate practice profile.

Ability to Manage the Full Legal Process

The legal team needs to actively manage the legal process through to completion — not simply draft documents and wait for instructions. This includes coordinating the data room process, managing question-and-answer protocols during due diligence, attending and coordinating meetings and negotiations, facilitating regulatory filings, and project-managing the conditions to closing. An M&A legal adviser who is passive about process management adds time and risk to the transaction.

Cross-Disciplinary Coverage Within the Legal Team

Complex M&A transactions involve legal questions across multiple specialisms — corporate, employment, real estate, intellectual property, regulatory, and sometimes criminal or litigation. A law firm that can handle all of these within a single team, or coordinate effectively with specialist colleagues, reduces the coordination cost and communication risk that arises when multiple separate firms are each handling a different legal aspect of the same deal.

Questions to Ask Any M&A Adviser Before Engaging

• What is the adviser’s specific experience with transactions in this size range and industry sector?
• Who specifically will be handling the engagement day-to-day — a senior partner or more junior team members?
• How does the adviser handle conflicts of interest, and does any conflict exist with the counterparty in this transaction?
• Will the adviser be engaged through to deal completion, or only for specific phases?
• What is the fee structure — fixed fee, hourly rates, or a success fee tied to transaction completion — and what is included in each?
• What is the adviser’s approach to confidentiality, and how is information managed within the team?
• Does the adviser have specific knowledge of the UAE regulatory approvals this transaction may require?

The UAE M&A Regulatory Context

M&A transactions in the UAE are subject to an evolving regulatory framework. Key elements the advisory team must be familiar with include:

• Federal Law No. 32 of 2021 on Commercial Companies — the primary corporate law governing share transfers, merger procedures, and shareholder rights for onshore UAE companies
• Free zone authority requirements — each free zone has its own rules on ownership transfers, with many requiring authority consent before a transaction can be completed
• Competition law notification — Federal Law No. 4 of 2012 and its 2023 amendments require notification of transactions exceeding specified market share or turnover thresholds before they can be completed
• Sector-specific approvals — financial services, healthcare, telecommunications, and other regulated sectors require prior approval from the relevant sector regulator before ownership changes hands
• Corporate Tax structuring — Federal Decree-Law No. 47 of 2022 has significant implications for how M&A transactions are structured; the tax treatment of a share purchase versus an asset purchase differs materially, and transactions involving Qualifying Free Zone Persons require specific analysis of how the acquisition affects the target’s QFZP status

Frequently Asked Questions (FAQs)

What is the difference between an M&A legal adviser and an M&A financial adviser?

An M&A legal adviser (law firm) handles the contractual, corporate law, and regulatory dimensions of the deal — drafting the Sale and Purchase Agreement, managing regulatory filings, and advising on warranties and indemnities. An M&A financial adviser handles the commercial and financial dimensions — valuation, due diligence, deal structuring, financial modelling, and negotiation support. Both roles are essential in a significant M&A transaction and are typically handled by separate professional teams.

What key questions should you ask an M&A adviser before engaging?

Ask about their specific experience with comparable transactions in size and industry, who will personally handle the engagement, how conflicts of interest are managed, whether they cover the full transaction or only specific phases, their fee structure and what it includes, and their knowledge of UAE-specific regulatory requirements relevant to the transaction.

Does a UAE M&A transaction require regulatory approval?

Depending on the transaction. Free zone share transfers typically require authority consent from the relevant free zone. Transactions exceeding specified thresholds under the UAE Competition Law require notification. Sector-specific approvals are needed in regulated industries. Corporate Tax implications must also be assessed for any UAE M&A transaction since the introduction of Federal Decree-Law No. 47 of 2022.

What is vendor due diligence and when is it used?

Vendor due diligence is an independent review of the target business commissioned by the seller before going to market. It identifies issues proactively — before a buyer’s team surfaces them during the acquisition process — allowing the seller to address them in advance and present a more credible, well-prepared business to potential buyers.

How does Corporate Tax affect M&A structuring in the UAE?

The choice between a share purchase and an asset purchase carries materially different Corporate Tax treatment under Federal Decree-Law No. 47 of 2022. Transactions involving free zone companies require analysis of how the acquisition affects the target’s Qualifying Free Zone Person status. Any inherited tax liabilities — undisclosed FTA assessments, unfiled returns, transfer pricing exposure — become the buyer’s problem in a share purchase, making tax due diligence a critical component of the pre-acquisition process.

How Farahat & Co. Can Help

Farahat & Co. provides M&A financial advisory, transaction advisory, valuation, due diligence, and deal structuring services to buyers and sellers across the UAE. Our team supports the full financial and commercial dimension of M&A transactions — from initial valuation and due diligence through to deal structure analysis, Corporate Tax implications assessment, and negotiation support — working alongside your legal counsel to complete transactions efficiently and correctly under the current UAE regulatory framework.

Contact Farahat & Co. today to discuss your M&A advisory requirements.