Famous M&A Middle East mergers and acquisitions

Famous M&A Middle East mergers and acquisitions

Blog Article

Strategic alliances and acquisitions provide businesses with many perks when entering unfamiliar markets.

GCC governments actively encourage mergers and acquisitions through incentives such as for instance taxation breaks and regulatory approval as a method to solidify companies and build up regional companies to become capable of compete on a worldwide scale, as would Amin Nasser likely inform you. The need for financial diversification and market expansion drives much of the M&A transactions into the GCC. GCC countries are working seriously 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 foreign investors because they will contribute to economic growth but, more crucially, to facilitate M&A transactions, which in turn will play an important 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 obstacles worldwide businesses face in Arab Gulf countries and emerging markets. Companies planning to enter and expand their reach in the GCC countries face different challenges, such as for example cultural differences, unfamiliar regulatory frameworks, and market competition. Nonetheless, when they acquire local companies or merge with local enterprises, they gain immediate use of regional knowledge and study their local partner's sucess. 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, which the giant e-commerce firm recognised as a strong competitor. Nonetheless, the acquisition not merely removed regional competition but also provided valuable regional insights, a client base, and an already established convenient infrastructure. Also, another notable instance could be the purchase of an Arab super software, namely a ridesharing company, by an international ride-hailing services provider. The multinational company gained a well-established manufacturer with a big user base and substantial familiarity with the local transport market and customer preferences through the purchase.

In a recent study that examines the connection between economic policy uncertainty and mergers and acquisitions in GCC markets, the authors found that Arab Gulf firms are more inclined to make acquisitions during periods of high economic policy uncertainty, which contradicts the behaviour of Western businesses. As an example, big Arab financial institutions secured acquisitions throughout the 2008 crises. Moreover, the study 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 prudent regarding acquisitions in comparison with their non-SOE counterparts. The SOE's risk-averse approach, based on this paper, stems from the imperative to protect national interest and minimising prospective financial uncertainty. Furthermore, takeovers 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 impact highlights the potential for SOEs just like the ones led by Naser Bustami and Nadhmi Al-Nasr to exploit possibilities in similar times by buying undervalued target companies.