Famous M&A Middle East mergers and acquisitions

Famous M&A Middle East mergers and acquisitions

Blog Article

Strategic alliances and acquisitions provide businesses with several benefits whenever entering unknown markets.

GCC governments actively promote mergers and acquisitions through incentives such as tax breaks and regulatory approval as a way to solidify companies and build up regional businesses to become capable of competing on a international level, as would Amin Nasser likely tell you. The need for economic diversification and market expansion drives much of the M&A transactions into the GCC. GCC countries are working seriously to bring in FDI by creating a favourable environment and increasing the ease of doing business for foreign investors. This strategy is not only directed to attract foreign investors simply because they will add to economic growth but, more most importantly, to enable M&A deals, which in turn will play a substantial role in allowing GCC-based companies to gain access to international markets and transfer technology and expertise.

In a recently available study that examines the relationship between economic policy uncertainty and mergers and acquisitions in GCC markets, the writers found that Arab Gulf firms are more likely to make acquisitions during periods of high economic policy uncertainty, which contradicts the conduct of Western businesses. As an example, large Arab finance institutions secured acquisitions throughout the 2008 crises. Also, the analysis suggests that state-owned enterprises are more unlikely than non-SOEs to make acquisitions during periods of high economic policy uncertainty. The the findings suggest that SOEs are more prudent regarding acquisitions compared to their non-SOE counterparts. The SOE's risk-averse approach, based on this paper, stems from the imperative to protect national interest and mitigate potential financial instability. Moreover, 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 impact highlights the potential for SOEs just like the people led by Naser Bustami and Nadhmi Al-Nasr to exploit possibilities in similar times by buying undervalued target companies.

Strategic mergers and acquisitions are seen as a way to tackle obstacles international businesses encounter in Arab Gulf countries and emerging markets. Businesses attempting to enter and expand their reach into the GCC countries face various challenges, such as cultural distinctions, unknown regulatory frameworks, and market competition. Nevertheless, when they buy regional businesses or merge with regional enterprises, they gain instant use of local knowledge and learn from their regional partners. 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 being a strong competitor. However, the purchase not only eliminated regional competition but additionally offered valuable regional insights, a customer base, and an already founded convenient infrastructure. Moreover, another notable example could be the acquisition of a Arab super application, namely a ridesharing business, by an international ride-hailing services provider. The international business gained a well-established brand with a big user base and extensive familiarity with the area transportation market and consumer preferences through the purchase.