The two basic forms of business combinations in Saudi Arabia are acquisition of the shares of a target company and acquisition of the underlying business and assets of a target company. A target company may be acquired either for cash or through the issuance of shares or other securities of the acquiring entity, or a combination of both.

Private companies

The two predominant legal corporate forms involved in private business combinations in Saudi Arabia are limited liability companies (LLCs) and joint-stock companies. Acquisition mechanics may involve the dissolution of the target company, whose assets and liabilities are then transferred into either a new or existing company, or the dissolution of both the acquiring and target companies, whose assets and liabilities are consolidated into a newly formed entity. In a private acquisition, any company (other than a cooperative company) may combine with another company of the same or a different corporate form. Private company combinations include joint ventures where two or more corporate entities act pursuant to a contractual arrangement to form a joint venture which does not have legal existence.