Famous M&A Middle East mergers and acquisitions

Famous M&A Middle East mergers and acquisitions

Blog Article

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

Strategic mergers and acquisitions have emerged as a way to overcome obstacles worldwide businesses encounter in Arab Gulf countries and emerging markets. Companies attempting to enter and expand their presence into the GCC countries face various problems, such as cultural distinctions, unfamiliar regulatory frameworks, and market competition. Nonetheless, if they acquire regional businesses or merge with regional enterprises, they gain instant access to regional knowledge and study their local partner's sucess. One of the most prominent examples 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 company recognised as being a strong contender. Nonetheless, the acquisition not only removed regional competition but also provided valuable local insights, a customer base, plus an already established convenient infrastructure. Moreover, another notable instance could be the acquisition of a Arab super software, namely a ridesharing company, by the worldwide ride-hailing services provider. The multinational company gained a well-established brand name having a big user base and considerable knowledge of the local transport market and consumer preferences through the acquisition.

GCC governments actively encourage mergers and acquisitions through incentives such as for example taxation breaks and regulatory approval as a means to consolidate companies and develop regional companies to be effective at compete at an a global scale, as would Amin Nasser likely inform you. The necessity for financial diversification and market expansion drives much of the M&A activities in the GCC. GCC countries are working earnestly to draw in FDI by developing a favourable ecosystem and bettering the ease of doing business for international investors. This plan is not only directed to attract foreign investors because they will contribute to economic growth but, more critically, to facilitate M&A deals, which in turn will play a substantial part in enabling GCC-based businesses to get access to international markets and transfer technology and expertise.

In a recent study that examines the relationship between economic policy uncertainty and mergers and acquisitions in GCC markets, the authors found that Arab Gulf firms are more likely to make acquisitions during periods of high economic policy uncertainty, which contradicts the behaviour of Western firms. For instance, large Arab banking institutions secured acquisitions throughout the financial crises. Moreover, the research demonstrates that state-owned enterprises are not as likely than non-SOEs to help make takeovers during times of high economic policy uncertainty. The the findings suggest that SOEs tend to be more cautious regarding acquisitions in comparison with their non-SOE counterparts. The SOE's risk-averse approach, in accordance with this paper, stems from the imperative to protect national interest and mitigate potential financial instability. Moreover, acquisitions 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 just like the people led by Naser Bustami and Nadhmi Al-Nasr to exploit possibilities in similar times by capturing undervalued target companies.