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 planning to expand their presence into the Arab Gulf.

Strategic mergers and acquisitions have emerged as a way to tackle obstacles worldwide businesses face in Arab Gulf countries and emerging markets. Companies wanting to enter and grow their presence within the GCC countries face various difficulties, such as cultural distinctions, unfamiliar regulatory frameworks, and market competition. Nevertheless, if they acquire regional businesses or merge with regional enterprises, they gain instant access to regional knowledge and learn from their local partner's sucess. One of the most prominent cases of successful acquisitions in GCC markets is when a giant worldwide e-commerce corporation acquired a regionally leading e-commerce platform, which the giant e-commerce firm recognised as a strong competitor. However, the acquisition not merely eliminated local competition but additionally provided valuable local insights, a client base, and an already established convenient infrastructure. Also, another notable instance may be the purchase of an Arab super application, particularly a ridesharing business, by an international ride-hailing services provider. The international corporation gained a well-established manufacturer with a big user base and considerable knowledge of the area transport market and customer preferences through the purchase.

GCC governments actively promote 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 have the capacity to competing on a worldwide level, as would Amin Nasser likely inform you. The necessity for financial diversification and market expansion drives much of the M&A activities in 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 international investors because they will contribute to economic growth but, more critically, to enable M&A deals, which in turn will play a substantial role in permitting GCC-based companies to gain access to international markets and transfer technology and expertise.

In a recently available 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 periods of high economic policy uncertainty, which contradicts the behaviour of Western firms. For instance, big Arab banking institutions secured takeovers through the financial crises. Moreover, the research demonstrates that state-owned enterprises are more unlikely than non-SOEs in order to make takeovers during times of high economic policy uncertainty. The the findings suggest that SOEs are far more cautious regarding takeovers in comparison to their non-SOE counterparts. The SOE's risk-averse approach, in accordance with this paper, stems from the imperative to protect national interest and minimising prospective financial uncertainty. Moreover, acquisitions during periods of high economic policy uncertainty are associated with 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 such times by buying undervalued target businesses.