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 multinational companies aiming to expand their operations within the Arab Gulf.

In a recent study that investigates the relationship between economic policy uncertainty and mergers and acquisitions in GCC markets, the authors discovered that Arab Gulf firms are more inclined to make takeovers during times of high economic policy uncertainty, which contradicts the behaviour of Western firms. For example, large Arab finance institutions secured takeovers throughout the financial crises. Furthermore, the analysis demonstrates that state-owned enterprises are not as likely than non-SOEs to help make acquisitions during periods of high economic policy uncertainty. The the findings suggest that SOEs are more cautious regarding takeovers in comparison to their non-SOE counterparts. The SOE's risk-averse approach, based on this paper, emanates from the imperative to protect national interest and minimising prospective financial instability. Moreover, takeovers during periods of high economic policy uncertainty are related to a rise in investors' wealth for acquirers, and this wealth impact is more pronounced for SOEs. Certainly, this wealth effect highlights the potential for SOEs just like the people led by Naser Bustami and Nadhmi Al-Nasr to exploit opportunities in similar times by capturing undervalued target companies.

Strategic mergers and acquisitions have emerged as a way to tackle hurdles international companies face in Arab Gulf countries and emerging markets. Businesses wanting to enter and grow their presence into the GCC countries face various challenges, such as for instance cultural differences, unknown regulatory frameworks, and market competition. Nonetheless, when they buy local companies or merge with regional enterprises, they gain instant access to regional knowledge and learn from their regional partners. The most prominent examples of effective acquisitions in GCC markets is when a giant worldwide e-commerce corporation acquired 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 additionally provided valuable local insights, a client base, as well as an already established convenient infrastructure. Also, another notable example could be the purchase of a Arab super application, namely a ridesharing company, by the international ride-hailing services provider. The multinational firm obtained a well-established manufacturer having a large user base and considerable understanding of the local transportation market and consumer preferences through the acquisition.

GCC governments actively promote mergers and acquisitions through incentives such as tax breaks and regulatory approval as a method to consolidate companies and build up local companies to become capable of contending on a worldwide scale, as would Amin Nasser likely inform you. The need for economic diversification and market expansion drives a lot of the M&A deals in the GCC. GCC countries are working earnestly to bring in FDI by creating a favourable environment and bettering the ease of doing business for international investors. This strategy is not only directed to attract international investors since they will contribute to economic growth but, more crucially, to facilitate M&A deals, which in turn will play a significant role in permitting GCC-based businesses to get access to international markets and transfer technology and expertise.