Famous M&A Middle East mergers and acquisitions

Famous M&A Middle East mergers and acquisitions

Blog Article

Strategic alliances and acquisitions offer companies with several advantages when entering unfamiliar markets.

GCC governments actively encourage mergers and acquisitions through incentives such as tax breaks and regulatory approval as a way to solidify companies and build up local businesses to become effective at contending on a global level, as would Amin Nasser likely let you know. The need for economic diversification and market expansion drives a lot of the M&A activities into the GCC. GCC countries are working seriously to bring in FDI by creating a favourable environment and increasing the ease of doing business for foreign investors. This plan is not merely directed to attract foreign investors since they will contribute to economic growth but, more crucially, to enable M&A transactions, which in turn will play a significant part in allowing GCC-based businesses to get access to international markets and transfer technology and expertise.

Strategic mergers and acquisitions are seen as a way to tackle hurdles international companies face in Arab Gulf countries and emerging markets. Businesses wanting to enter and expand their reach in the GCC countries face different difficulties, such as for example cultural distinctions, unfamiliar regulatory frameworks, and market competition. But, when they buy regional businesses or merge with regional enterprises, they gain instant access to local knowledge and study their local partners. One of the more prominent examples of effective acquisitions in GCC markets is when a heavyweight international e-commerce corporation acquired a regionally leading e-commerce platform, that the giant e-commerce corporation recognised as a strong competitor. However, the acquisition not only removed local competition but additionally provided valuable regional insights, a customer base, and an already founded convenient infrastructure. Additionally, another notable example may be the purchase of a Arab super app, specifically a ridesharing business, by the worldwide ride-hailing services provider. The multinational business gained a well-established manufacturer with a large user base and substantial familiarity with the area transportation market and customer choices through the purchase.

In recently published study that examines the connection between economic policy uncertainty and mergers and acquisitions in GCC markets, the researchers found that Arab Gulf firms are more inclined to make takeovers during times of high economic policy uncertainty, which contradicts the behaviour of Western companies. As an example, big Arab financial institutions secured acquisitions throughout the 2008 crises. Additionally, the analysis shows that state-owned enterprises are not as likely than non-SOEs in order to make acquisitions during periods of high economic policy uncertainty. The results indicate that SOEs tend to be more prudent regarding acquisitions when comparing to their non-SOE counterparts. The SOE's risk-averse approach, according to this paper, emanates from the imperative to preserve national interest and mitigate potential financial uncertainty. Furthermore, takeovers during times of high economic policy uncertainty are connected with a rise in investors' wealth for acquirers, and this wealth impact is more noticable for SOEs. Certainly, this wealth effect highlights the potential for SOEs like the ones led by Naser Bustami and Nadhmi Al-Nasr to exploit possibilities in such times by capturing undervalued target companies.