Famous M&A Middle East mergers and alliances

Famous M&A Middle East mergers and alliances

Blog Article

Strategic alliances and acquisitions offer companies with many perks when entering unknown markets.

GCC governments actively promote mergers and acquisitions through incentives such as for example tax breaks and regulatory approval as a means to solidify industries and build up local companies to become have the capacity to 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 transactions into the GCC. GCC countries are working seriously to entice 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 since they will contribute to economic growth but, more crucially, to enable M&A transactions, which in turn will play a substantial role in enabling GCC-based companies to get access to international markets and transfer technology and expertise.

Strategic mergers and acquisitions have emerged as a way to overcome hurdles international companies face in Arab Gulf countries and emerging markets. Businesses wanting to enter and grow their presence within the GCC countries face various difficulties, such as cultural distinctions, unfamiliar regulatory frameworks, and market competition. But, when they buy local companies or merge with regional enterprises, they gain immediate usage of local knowledge and study their local partner's sucess. One of the most prominent cases of successful acquisitions in GCC markets is when a heavyweight worldwide e-commerce corporation acquired a regionally leading e-commerce platform, that the giant e-commerce corporation recognised being a strong contender. Nonetheless, the purchase not only removed local competition but additionally provided valuable local insights, a client base, plus an already established convenient infrastructure. Additionally, another notable instance may be the purchase of an Arab super application, namely a ridesharing company, by the international ride-hailing services provider. The multinational firm obtained a well-established brand by having a large user base and substantial familiarity with the local transport market and consumer preferences through the acquisition.

In recently published study that examines the relationship between economic policy uncertainty and mergers and acquisitions in GCC markets, the researchers discovered that Arab Gulf firms are more likely to make acquisitions during times of high economic policy uncertainty, which contradicts the conduct of Western firms. For instance, big Arab finance institutions secured acquisitions throughout the 2008 crises. Additionally, the study demonstrates that state-owned enterprises are more unlikely than non-SOEs to make acquisitions during periods of high economic policy uncertainty. The the findings suggest that SOEs are more prudent regarding acquisitions in comparison to their non-SOE counterparts. The SOE's risk-averse approach, in accordance with this paper, emanates from the imperative to preserve national interest and mitigate prospective financial uncertainty. Furthermore, takeovers during periods of high economic policy uncertainty are associated with an increase 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 people led by Naser Bustami and Nadhmi Al-Nasr to exploit opportunities in such times by capturing undervalued target companies.