Famous M&A Middle East mergers and partnerships

Famous M&A Middle East mergers and partnerships

Blog Article

Strategic alliances and acquisitions are effective strategies for multinational companies looking to expand their operations in the Arab Gulf.

Strategic mergers and acquisitions have emerged as a way to tackle hurdles worldwide businesses face in Arab Gulf countries and emerging markets. Companies wanting to enter and expand their reach into the GCC countries face different problems, such as for instance cultural distinctions, unfamiliar regulatory frameworks, and market competition. Nevertheless, when they acquire local companies or merge with local enterprises, they gain instant use of local knowledge and learn from their local partner's sucess. One of the more prominent cases of effective acquisitions in GCC markets is when a giant international e-commerce corporation bought a regionally leading e-commerce platform, that the giant e-commerce firm recognised being a strong competitor. Nevertheless, the acquisition not merely removed local competition but also offered valuable regional insights, a client base, as well as an already established convenient infrastructure. Furthermore, another notable instance may be the acquisition 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 purchase.

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 takeovers during times of high economic policy uncertainty, which contradicts the behaviour of Western businesses. For instance, large Arab finance institutions secured takeovers throughout the financial crises. Furthermore, the analysis demonstrates that state-owned enterprises are less likely than non-SOEs to make takeovers during periods of high economic policy uncertainty. The the findings indicate that SOEs are more cautious regarding acquisitions when compared 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 minimising potential financial uncertainty. Moreover, takeovers during periods of high economic policy uncertainty are associated with a rise in shareholders' wealth for acquirers, and this wealth impact 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 possibilities in such times by buying undervalued target companies.

GCC governments actively promote mergers and acquisitions through incentives such as taxation breaks and regulatory approval as a means to solidify industries and develop local businesses to be have the capacity to competing at an a global level, as would Amin Nasser likely inform you. The need for financial diversification and market expansion drives much of the M&A transactions into the GCC. GCC countries are working earnestly to bring in FDI by developing a favourable ecosystem and increasing the ease of doing business for international investors. This plan is not only directed to attract international investors because they will contribute to economic growth but, more most importantly, to facilitate M&A deals, which in turn will play a significant role in enabling GCC-based companies to achieve access to international markets and transfer technology and expertise.