Famous M&A Middle East mergers and acquisitions

Famous M&A Middle East mergers and acquisitions

Blog Article

Strategic alliances and acquisitions provide companies with several benefits whenever entering unfamiliar markets.

In recently published study that investigates the connection between economic policy uncertainty and mergers and acquisitions in GCC markets, the writers found that Arab Gulf firms are more inclined to make takeovers during periods of high economic policy uncertainty, which contradicts the behaviour of Western firms. As an example, big Arab financial institutions secured acquisitions through the 2008 crises. Moreover, the study shows that state-owned enterprises are more unlikely than non-SOEs to help make acquisitions during periods of high economic policy uncertainty. The the findings indicate that SOEs are more cautious regarding acquisitions in comparison with their non-SOE counterparts. The SOE's risk-averse approach, according to this paper, stems from the imperative to protect national interest and mitigate prospective financial instability. Moreover, takeovers during periods of high economic policy uncertainty are connected with a rise in shareholders' wealth for acquirers, and this wealth impact is more pronounced for SOEs. Indeed, this wealth impact highlights the potential for SOEs like the people led by Naser Bustami and Nadhmi Al-Nasr to exploit opportunities in similar times by buying undervalued target companies.

Strategic mergers and acquisitions have emerged as a way to overcome hurdles international companies face in Arab Gulf countries and emerging markets. Companies planning to enter and expand their reach within the GCC countries face various problems, such as cultural distinctions, unknown regulatory frameworks, and market competition. Nevertheless, when they buy local businesses or merge with local enterprises, they gain instant use of local knowledge and study their regional partners. One of the most prominent examples of successful acquisitions in GCC markets is when a giant worldwide e-commerce corporation acquired a regionally leading e-commerce platform, that the giant e-commerce corporation recognised as being a strong competitor. However, the purchase not only removed local competition but also provided valuable local insights, a client base, and an already founded convenient infrastructure. Moreover, another notable instance may be the purchase of an Arab super app, specifically a ridesharing company, by the international ride-hailing services provider. The international business gained a well-established brand by having a large user base and considerable understanding of the area transportation market and consumer preferences through the purchase.

GCC governments actively encourage mergers and acquisitions through incentives such as for example tax breaks and regulatory approval as a method to consolidate companies and build regional companies to become capable of contending on a worldwide level, as would Amin Nasser likely inform you. The need for economic diversification and market expansion drives a lot of the M&A activities in the GCC. GCC countries are working earnestly to bring in FDI by creating a favourable environment and bettering the ease of doing business for foreign investors. This plan is not only directed to attract international investors simply 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 enabling GCC-based companies to gain access to international markets and transfer technology and expertise.