Famous M&A Middle East mergers and partnerships

Famous M&A Middle East mergers and partnerships

Blog Article

Strategic alliances and acquisitions are effective techniques for international businesses planning to expand their operations within the Arab Gulf.

In a recently available study that investigates the relationship between economic policy uncertainty and mergers and acquisitions in GCC markets, the researchers found that Arab Gulf firms are more likely to make takeovers during periods of high economic policy uncertainty, which contradicts the behaviour of Western businesses. As an example, large Arab finance institutions secured takeovers throughout the financial crises. Additionally, the research suggests that state-owned enterprises are less likely than non-SOEs to produce takeovers during periods of high economic policy uncertainty. The the findings suggest that SOEs are more prudent regarding takeovers in comparison with their non-SOE counterparts. The SOE's risk-averse approach, in accordance with this paper, emanates from the imperative to protect national interest and minimising potential financial instability. Furthermore, takeovers during times of high economic policy uncertainty are associated with an increase in shareholders' wealth for acquirers, and this wealth effect is more pronounced for SOEs. Certainly, this wealth impact highlights the potential for SOEs like the ones led by Naser Bustami and Nadhmi Al-Nasr to exploit possibilities in such times by buying undervalued target businesses.

GCC governments actively encourage mergers and acquisitions through incentives such as for example tax breaks and regulatory approval as a way to consolidate companies and build up local companies to become capable of contending on a worldwide level, as would Amin Nasser likely let you know. The need for economic diversification and market expansion drives a lot of the M&A activities in the GCC. GCC countries are working earnestly to invite FDI by creating a favourable ecosystem and increasing the ease of doing business for foreign investors. This strategy is not only directed to attract international investors because they will contribute to economic growth but, more critically, to enable M&A transactions, which in turn will play a substantial part in enabling GCC-based companies to get access to international markets and transfer technology and expertise.

Strategic mergers and acquisitions are seen as a way to overcome hurdles international businesses encounter in Arab Gulf countries and emerging markets. Businesses attempting to enter and grow their presence into the GCC countries face different challenges, such as for instance cultural distinctions, unknown regulatory frameworks, and market competition. However, once they acquire regional companies or merge with regional enterprises, they gain immediate access to regional knowledge and study their regional partner's sucess. One of the most prominent examples of effective acquisitions in GCC markets is when a heavyweight worldwide e-commerce corporation bought a regionally leading e-commerce platform, which the giant e-commerce company recognised as being a strong rival. But, the acquisition not only eliminated local competition but additionally offered valuable local insights, a customer base, as well as an already founded convenient infrastructure. Additionally, another notable example is the acquisition of an Arab super app, specifically a ridesharing business, by the worldwide ride-hailing services provider. The international corporation obtained a well-established brand name with a large user base and extensive knowledge of the local transportation market and customer preferences through the acquisition.