Famous M&A Middle East mergers and acquisitions

Famous M&A Middle East mergers and acquisitions

Blog Article

International businesses attempting to enter GCC markets can overcome regional challenges through M&A transactions.

Strategic mergers and acquisitions are seen as a way to tackle hurdles worldwide companies encounter in Arab Gulf countries and emerging markets. Businesses planning to enter and expand their presence in the GCC countries face various difficulties, such as for instance cultural distinctions, unfamiliar regulatory frameworks, and market competition. Nonetheless, if they acquire local businesses or merge with regional enterprises, they gain immediate use of local knowledge and learn from their regional partner's sucess. The most prominent cases of effective acquisitions in GCC markets is when a heavyweight worldwide e-commerce corporation bought a regionally leading e-commerce platform, that the giant e-commerce firm recognised as being a strong rival. But, the purchase not only removed regional competition but in addition provided valuable regional insights, a client base, plus an already founded convenient infrastructure. Also, another notable instance may be the acquisition of a Arab super software, particularly a ridesharing company, by the worldwide ride-hailing services provider. The multinational corporation obtained a well-established brand name with a large user base and extensive understanding of the area transportation market and customer preferences through the acquisition.

GCC governments actively promote mergers and acquisitions through incentives such as for example taxation breaks and regulatory approval as a method to solidify industries and build local companies to become have the capacity to competing on a international level, as would Amin Nasser likely let you know. The necessity for financial diversification and market expansion drives much of the M&A transactions into the GCC. GCC countries are working seriously to attract FDI by developing a favourable ecosystem and bettering the ease of doing business for foreign investors. This plan is not merely directed to attract foreign investors simply because they will add to economic growth but, more most importantly, to facilitate M&A transactions, which in turn will play an important part in permitting GCC-based businesses to get access to international markets and transfer technology and expertise.

In a recent study that investigates the connection between economic policy uncertainty and mergers and acquisitions in GCC markets, the authors found that Arab Gulf firms are more inclined to make takeovers during periods of high economic policy uncertainty, which contradicts the behaviour of Western companies. As an example, big Arab financial institutions secured acquisitions through the 2008 crises. Additionally, the study demonstrates that state-owned enterprises are not as likely than non-SOEs to make acquisitions during periods of high economic policy uncertainty. The the findings suggest that SOEs are far more prudent regarding acquisitions when comparing to their non-SOE counterparts. The SOE's risk-averse approach, according to this paper, emanates from the imperative to preserve national interest and minimising potential financial instability. Furthermore, takeovers during times of high economic policy uncertainty are connected with a rise in investors' wealth for acquirers, and this wealth effect is more pronounced for SOEs. Indeed, this wealth effect highlights the potential for SOEs like the ones led by Naser Bustami and Nadhmi Al-Nasr to exploit opportunities in such times by buying undervalued target businesses.