Famous M&A Middle East mergers and acquisitions

Famous M&A Middle East mergers and acquisitions

Blog Article

Foreign companies attempting to enter GCC markets can overcome regional challenges through M&A transactions.

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 acquisitions during periods of high economic policy uncertainty, which contradicts the behaviour of Western firms. For example, big Arab finance institutions secured takeovers through the 2008 crises. Also, the research demonstrates that state-owned enterprises are not as likely than non-SOEs in order to make takeovers during times of high economic policy uncertainty. The results indicate that SOEs are far more cautious regarding acquisitions compared to their non-SOE counterparts. The SOE's risk-averse approach, according to this paper, stems from the imperative to preserve national interest and mitigate prospective financial uncertainty. Moreover, takeovers during periods of high economic policy uncertainty are related to an increase in investors' wealth for acquirers, and this wealth effect is more noticable for SOEs. Indeed, this wealth effect highlights the potential for SOEs just like the people led by Naser Bustami and Nadhmi Al-Nasr to exploit possibilities in similar times by capturing undervalued target companies.

Strategic mergers and acquisitions have emerged as a way to tackle obstacles international companies encounter in Arab Gulf countries and emerging markets. Companies wanting to enter and expand their presence into the GCC countries face various problems, such as for instance cultural differences, unfamiliar regulatory frameworks, and market competition. Nonetheless, when they buy local companies or merge with regional enterprises, they gain instant access to regional knowledge and study their local partners. One of the most prominent cases of effective acquisitions in GCC markets is when a giant international e-commerce corporation bought a regionally leading e-commerce platform, which the giant e-commerce company recognised being a strong rival. Nevertheless, the acquisition not only eliminated regional competition but also provided valuable local insights, a customer base, plus an already established convenient infrastructure. Additionally, another notable example could be the acquisition of a Arab super application, namely a ridesharing business, by the international ride-hailing services provider. The multinational business obtained a well-established brand name having a big user base and considerable familiarity with the area transport market and consumer choices through the purchase.

GCC governments actively promote mergers and acquisitions through incentives such as for example taxation breaks and regulatory approval as a way to solidify companies and build regional companies to be effective at competing on a global level, as would Amin Nasser likely inform you. The need for economic diversification and market expansion drives a lot of the M&A deals into the GCC. GCC countries are working seriously to draw in FDI by developing a favourable environment and bettering the ease of doing business for international investors. This strategy is not merely directed to attract foreign investors since they will add to economic growth but, more most importantly, to facilitate M&A deals, which in turn will play an important role in allowing GCC-based businesses to achieve access to international markets and transfer technology and expertise.