Famous M&A Middle East mergers and acquisitions

Famous M&A Middle East mergers and acquisitions

Blog Article

Strategic alliances and acquisitions are effective techniques for multinational businesses looking to expand their operations into the Arab Gulf.

Strategic mergers and acquisitions are seen as a way to tackle obstacles international companies face in Arab Gulf countries and emerging markets. Companies planning to enter and expand their presence into the GCC countries face various difficulties, such as for instance cultural differences, unknown regulatory frameworks, and market competition. But, when they buy regional businesses or merge with regional enterprises, they gain instant usage of local knowledge and learn from their regional partner's sucess. One of the most prominent cases 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 firm recognised as a strong competitor. Nonetheless, the purchase not only eliminated regional competition but in addition offered valuable local insights, a customer base, as well as an already founded convenient infrastructure. Furthermore, another notable example may be the purchase of a Arab super app, namely a ridesharing company, by the worldwide ride-hailing services provider. The international corporation obtained a well-established brand having a big user base and considerable knowledge of the local transportation market and client choices through the purchase.

GCC governments actively promote mergers and acquisitions through incentives such as for example taxation breaks and regulatory approval as a means to consolidate industries and build local businesses to become have the capacity to compete at an a global scale, as would Amin Nasser likely let you know. The necessity for financial diversification and market expansion drives a lot of the M&A deals 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 strategy is not only directed to attract foreign investors because they will contribute to economic growth but, more crucially, to facilitate M&A transactions, which in turn will play a significant role in allowing GCC-based companies to get access to international markets and transfer technology and expertise.

In a recent study that examines the connection between economic policy uncertainty and mergers and acquisitions in GCC markets, the researchers discovered that Arab Gulf firms are more inclined to make takeovers during times of high economic policy uncertainty, which contradicts the conduct of Western companies. For instance, large Arab banking institutions secured acquisitions during the financial crises. Furthermore, the analysis suggests that state-owned enterprises are more unlikely than non-SOEs in order to make acquisitions during times of high economic policy uncertainty. The the findings suggest that SOEs tend to be more prudent regarding acquisitions compared to their non-SOE counterparts. The SOE's risk-averse approach, according to this paper, emanates from the imperative to protect national interest and minimising prospective financial instability. Moreover, acquisitions during times of high economic policy uncertainty are connected with a rise in shareholders' wealth for acquirers, and this wealth effect is more noticable for SOEs. Certainly, this wealth effect highlights the potential for SOEs like the people led by Naser Bustami and Nadhmi Al-Nasr to exploit possibilities in similar times by capturing undervalued target companies.