Famous M&A Middle East mergers and acquisitions

Famous M&A Middle East mergers and acquisitions

Blog Article

Strategic alliances and acquisitions offer companies with several advantages whenever entering unfamiliar markets.

GCC governments actively encourage mergers and acquisitions through incentives such as for example tax breaks and regulatory approval as a way to solidify industries and build up regional businesses to be effective at compete on a international level, as would Amin Nasser likely let you know. The necessity for economic diversification and market expansion drives much of the M&A transactions into the GCC. GCC countries are working seriously to entice FDI by developing a favourable ecosystem and increasing the ease of doing business for foreign investors. This strategy is not merely directed to attract international investors because they will contribute to economic growth but, more critically, to enable 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.

In recently published study that examines the relationship between economic policy uncertainty and mergers and acquisitions in GCC markets, the writers discovered that Arab Gulf firms are more inclined to make takeovers during times of high economic policy uncertainty, which contradicts the behaviour of Western companies. For instance, big Arab finance institutions secured takeovers during the financial crises. Moreover, the research demonstrates that state-owned enterprises are more unlikely than non-SOEs to make acquisitions during periods of high economic policy uncertainty. The results indicate that SOEs tend to be more prudent regarding acquisitions in comparison to their non-SOE counterparts. The SOE's risk-averse approach, in accordance with this paper, stems from the imperative to protect national interest and minimising prospective financial uncertainty. Furthermore, takeovers during times of high economic policy uncertainty are connected with a rise in investors' wealth for acquirers, and this wealth impact 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 possibilities in such times by capturing undervalued target companies.

Strategic mergers and acquisitions are seen as a way to overcome obstacles international businesses encounter in Arab Gulf countries and emerging markets. Businesses planning to enter and grow their reach within the GCC countries face various difficulties, such as for instance cultural differences, unfamiliar regulatory frameworks, and market competition. However, when they buy regional companies or merge with local enterprises, they gain immediate use of local knowledge and learn from their regional partner's sucess. One of the more prominent cases of successful acquisitions in GCC markets is when a giant international e-commerce corporation bought a regionally leading e-commerce platform, that the giant e-commerce company recognised being a strong competitor. Nevertheless, the acquisition not merely removed regional competition but additionally offered valuable regional insights, a customer base, and an already established convenient infrastructure. Furthermore, another notable instance could be the purchase of an Arab super app, particularly a ridesharing business, by an international ride-hailing services provider. The international firm gained a well-established brand name with a big user base and substantial understanding of the local transport market and client preferences through the acquisition.