Famous M&A Middle East mergers and acquisitions

Famous M&A Middle East mergers and acquisitions

Blog Article

Foreign companies wanting to enter GCC markets can overcome regional challenges through M&A activities.

GCC governments actively encourage mergers and acquisitions through incentives such as tax breaks and regulatory approval as a way to consolidate industries and develop local businesses to be have the capacity to competing at an a global scale, as would Amin Nasser likely let you know. The need for economic diversification and market expansion drives a lot of the M&A activities into the GCC. GCC countries are working seriously to invite FDI by making a favourable environment and bettering the ease of doing business for international investors. This strategy is not merely directed to attract international investors because they will add to economic growth but, more most importantly, to facilitate M&A deals, which in turn will play a substantial role in permitting GCC-based businesses to achieve access to international markets and transfer technology and expertise.

Strategic mergers and acquisitions have emerged as a way to overcome obstacles worldwide companies encounter in Arab Gulf countries and emerging markets. Businesses planning to enter and grow their presence within the GCC countries face different challenges, such as for example cultural distinctions, unfamiliar regulatory frameworks, and market competition. Nevertheless, if they buy local businesses or merge with local enterprises, they gain instant access to local knowledge and study their regional partner's sucess. One of the most prominent examples 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 company recognised as being a strong rival. However, the acquisition not merely removed regional competition but also offered valuable local insights, a customer base, as well as an already founded convenient infrastructure. Additionally, another notable example is the acquisition of a Arab super software, particularly a ridesharing company, by an international ride-hailing services provider. The multinational company gained a well-established manufacturer by having a big user base and extensive knowledge of the local transportation market and client choices through the purchase.

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 likely to make takeovers during times of high economic policy uncertainty, which contradicts the conduct of Western businesses. As an example, big Arab finance institutions secured acquisitions during the financial crises. Furthermore, the study shows that state-owned enterprises are less likely than non-SOEs to create acquisitions during periods of high economic policy uncertainty. The results indicate that SOEs are more prudent regarding acquisitions compared to their non-SOE counterparts. The SOE's risk-averse approach, according to this paper, emanates from the imperative to preserve national interest and mitigate prospective financial uncertainty. Furthermore, takeovers during times of high economic policy uncertainty are related to 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 just like the people led by Naser Bustami and Nadhmi Al-Nasr to exploit possibilities in similar times by buying undervalued target businesses.