Kuwaiti Competition Authority reviews economic concentration applications

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KUWAIT CITY, June 24: The Kuwaiti Competition Protection Authority has announced the receipt of three applications for completing the economic concentration process, reports Al-Seyassah daily. According to a post on the social networking site “X” by the agency, the following applications were received:
■ Domo Toico SRL (Milan) and Kiko S.p.A. (Bergamo Joint Stock Company) have applied for Domo Toico SRL to acquire 70% of Kiko S.p.A.’s shares.
■ Richemont Italia Holding S.P.A. and Vernier S.p.A. Italia have applied for Richemont Italia Holding S.P.A. to acquire 100% of Vernier S.p.A. Italia’s capital.
■ Duet Political Middle Pedic (France) has applied to acquire 51% of Nasco France’s capital. It’s worth noting that Law No. 72 of 2020 defines economic concentration operations as a significant change in control over the relevant market.

Meanwhile, the Al-Jarida daily said, the CMA has approved requests from 69 listed companies to activate their rights to buy and sell treasury shares since the beginning of the year.

This represents 47.5% of the total 145 listed companies. These approvals allow companies to engage in transactions involving their treasury shares after meeting all regulatory conditions. Treasury shares serve several strategic purposes for companies. They can be utilized to settle debts, facilitate swap operations during acquisitions, and even be allocated to employees through stock option programs.

Additionally, companies use treasury shares to stabilize their stock prices in the market, reduce capital by cancelling shares, issue bonus shares, and enhance earnings per share by decreasing the number of outstanding shares. Companies may seek approval to buy back or sell up to 10% of their shares, often to address liquidity issues or for financial restructuring. Some companies collaborate with market makers licensed as investment firms to maintain liquidity and balance demand for their shares by lending treasury shares.

Furthermore, companies have leveraged treasury shares to distribute profits to shareholders, converting them into cash through sales operations. However, regulations prohibit trading in treasury shares during financial statement disclosure periods, ensuring transparency and preventing market manipulation.

The CMA has recently expanded the permissible uses of treasury shares, including options such as offsetting losses, reducing capital, and distributing profits. Official approvals for dealing in treasury shares are valid for six months, and companies are required to report all transactions annually to the Authority. In conclusion, treasury shares play a pivotal role in corporate finance strategies, offering companies flexibility in capital management, shareholder relations, and strategic financial operations under regulatory oversight.

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