Successful M&A Middle East mergers and partnerships

Successful M&A Middle East mergers and partnerships

Blog Article

Strategic alliances and acquisitions provide businesses with several advantages whenever entering unfamiliar markets.

GCC governments actively encourage mergers and acquisitions through incentives such as for example taxation breaks and regulatory approval as a means to solidify industries and build up regional companies to become have the capacity to competing on a global level, as would Amin Nasser likely let you know. The need for financial diversification and market expansion drives much of the M&A deals in the GCC. GCC countries are working seriously to bring in FDI by developing a favourable environment 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 critically, to enable M&A transactions, which in turn will play a substantial role in permitting GCC-based companies to achieve access to international markets and transfer technology and expertise.

Strategic mergers and acquisitions have emerged as a way to overcome hurdles worldwide businesses encounter in Arab Gulf countries and emerging markets. Companies attempting to enter and grow their presence within the GCC countries face different challenges, such as for example cultural differences, unfamiliar regulatory frameworks, and market competition. But, when they buy regional businesses or merge with local enterprises, they gain instant access to regional knowledge and learn from their regional partner's sucess. One of the most prominent cases of effective acquisitions in GCC markets is when a giant worldwide e-commerce corporation bought a regionally leading e-commerce platform, which the giant e-commerce firm recognised as a strong competitor. But, the acquisition not only removed regional competition but also offered valuable regional insights, a client base, and an already founded convenient infrastructure. Furthermore, another notable example is the acquisition of a Arab super app, specifically a ridesharing company, by an worldwide ride-hailing services provider. The international business gained a well-established brand name having a big user base and extensive understanding of the area transportation market and client choices through the acquisition.

In a recently available study that investigates the relationship between economic policy uncertainty and mergers and acquisitions in GCC markets, the writers discovered that Arab Gulf firms are more likely to make takeovers during times of high economic policy uncertainty, which contradicts the behaviour of Western companies. As an example, large Arab banking institutions secured takeovers during the financial crises. Additionally, the study demonstrates that state-owned enterprises are more unlikely than non-SOEs to make acquisitions during times of high economic policy uncertainty. The the findings suggest that SOEs are more prudent regarding takeovers when compared 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 prospective financial uncertainty. Furthermore, takeovers during periods of high economic policy uncertainty are associated with an increase in investors' wealth for acquirers, and this wealth impact is more noticable for SOEs. Certainly, 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 capturing undervalued target businesses.