Famous M&A Middle East mergers and acquisitions

Famous M&A Middle East mergers and acquisitions

Blog Article

Strategic alliances and acquisitions are effective strategies for international companies looking to expand their operations in the Arab Gulf.

GCC governments actively promote mergers and acquisitions through incentives such as tax breaks and regulatory approval as a means to solidify industries and build up regional companies to be have the capacity to contending on a global level, as would Amin Nasser likely let you know. The need for financial diversification and market expansion drives a lot of the M&A activities into the GCC. GCC countries are working earnestly to attract FDI by making a favourable environment and increasing the ease of doing business for international investors. This strategy is not merely directed to attract international investors since they will add to economic growth but, more critically, to facilitate M&A transactions, which in turn will play an important part in permitting 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 obstacles international companies face in Arab Gulf countries and emerging markets. Companies wanting to enter and grow their presence into the GCC countries face different difficulties, such as cultural distinctions, unfamiliar regulatory frameworks, and market competition. But, once they buy local businesses or merge with local enterprises, they gain immediate usage of local knowledge and study their local partner's sucess. One of the most prominent cases of successful acquisitions in GCC markets is when a heavyweight international e-commerce corporation bought a regionally leading e-commerce platform, that the giant e-commerce company recognised as being a strong competitor. But, the acquisition not merely eliminated regional competition but in addition offered valuable regional insights, a customer base, as well as an already founded convenient infrastructure. Moreover, another notable instance is the purchase of a Arab super application, particularly a ridesharing company, by the worldwide ride-hailing services provider. The multinational company obtained a well-established brand with a large user base and considerable knowledge of the area transport market and customer choices through the purchase.

In a recent study that investigates the connection between economic policy uncertainty and mergers and acquisitions in GCC markets, the authors discovered that Arab Gulf firms are more inclined to make acquisitions during periods of high economic policy uncertainty, which contradicts the conduct of Western businesses. For example, big Arab finance institutions secured acquisitions throughout the 2008 crises. Furthermore, the research suggests that state-owned enterprises are less likely than non-SOEs to produce acquisitions during periods of high economic policy uncertainty. The results suggest that SOEs are far more cautious regarding acquisitions in comparison to their non-SOE counterparts. The SOE's risk-averse approach, in accordance with this paper, emanates from the imperative to preserve national interest and mitigate prospective financial uncertainty. Furthermore, takeovers during periods of high economic policy uncertainty are related to an increase 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 opportunities in similar times by buying undervalued target businesses.