GAC approves Arabian Oud acquiring Oud Elite

The Saudi General Authority for Competition announced, through an official statement, today, Monday, that it has no objection to the (Arabian Company for Trading Oud and Oriental Perfumes) acquisition of (Oud Elite Trading).

The Competition Authority stated that it knew the commodity dimension of the deal in the oriental perfumes and oud market. The authority defined the geographical scope of the deal as a regional one due to the increase in the spread of social media and the growing trend of online retail trade and exhibitions held in the region.

Accordingly, the authority has studied the oriental perfume market in the region to determine whether or not there are concerns about competition

The commission’s study concluded that it is not expected that there will be concerns affecting competition in the Kingdom of Saudi Arabia because the perfume market is a market with high growth and increasing demand, and the low barriers to entry in the retail market lead to an increase in competitive pressure in this sector.

According to the statement of the GAC, the transactions between the parties to the deal are few and are limited to some aromatic sticks and oils, and because neither of the two companies is vertically integrated with the competing companies (they do not manufacture or distribute to others) the deal will not negatively affect the supply chains of market participants Which leads to harming competition or putting pressure on competitors.

The authority concluded its statement that traditional stores, electronic stores and foreign stores that have a line of oriental perfumes are a competitive restriction on the concerned parties as they offer similar products, which does not show any restrictions on the flexibility of substitution.