Famous M&A Middle East mergers and acquisitions

Famous M&A Middle East mergers and acquisitions

Blog Article

Strategic alliances and acquisitions are effective approaches for international companies aiming to expand their operations into the Arab Gulf.

In recently published study that examines the relationship between economic policy uncertainty and mergers and acquisitions in GCC markets, the authors found 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 example, large Arab finance institutions secured takeovers throughout the financial crises. Furthermore, the analysis suggests that state-owned enterprises are more unlikely than non-SOEs in order to make takeovers during times of high economic policy uncertainty. The results indicate that SOEs are far more cautious regarding acquisitions in comparison with their non-SOE counterparts. The SOE's risk-averse approach, based on this paper, emanates from the imperative to protect national interest and mitigate potential financial uncertainty. Moreover, acquisitions during times of high economic policy uncertainty are related to an increase in investors' wealth for acquirers, and this wealth effect is more pronounced for SOEs. Certainly, this wealth effect highlights the potential for SOEs just like the ones led by Naser Bustami and Nadhmi Al-Nasr to exploit opportunities in similar times by buying undervalued target companies.

Strategic mergers and acquisitions have emerged as a way to overcome obstacles worldwide businesses encounter in Arab Gulf countries and emerging markets. Businesses wanting to enter and grow their reach in the GCC countries face different difficulties, such as cultural distinctions, unfamiliar regulatory frameworks, and market competition. However, if they acquire local companies or merge with regional enterprises, they gain instant access to local knowledge and study their regional partners. One of the most prominent examples of successful acquisitions in GCC markets is when a giant international e-commerce corporation acquired a regionally leading e-commerce platform, which the giant e-commerce firm recognised being a strong contender. Nonetheless, the purchase not only eliminated regional competition but also provided valuable regional insights, a client base, as well as an already founded convenient infrastructure. Furthermore, another notable instance could be the purchase of a Arab super application, specifically a ridesharing company, by an international ride-hailing services provider. The international firm obtained a well-established brand name having a large user base and extensive knowledge of the local transport market and client preferences through the acquisition.

GCC governments actively encourage mergers and acquisitions through incentives such as for instance taxation breaks and regulatory approval as a means to solidify companies and build up local companies to be have the capacity to competing at an a worldwide scale, as would Amin Nasser likely inform you. The need for financial diversification and market expansion drives a lot of the M&A deals into the GCC. GCC countries are working seriously to invite FDI by creating a favourable ecosystem and bettering the ease of doing business for international investors. This plan is not merely directed to attract international investors because they will add to economic growth but, more critically, to enable M&A transactions, which in turn will play a significant part in enabling GCC-based businesses to get access to international markets and transfer technology and expertise.