Famous M&A Middle East mergers and alliances

Famous M&A Middle East mergers and alliances

Blog Article

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

In a recently available study that examines the relationship between economic policy uncertainty and mergers and acquisitions in GCC markets, the researchers discovered 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 instance, large Arab finance institutions secured takeovers during the 2008 crises. Also, the research shows that state-owned enterprises are more unlikely than non-SOEs to make acquisitions during periods of high economic policy uncertainty. The results suggest that SOEs tend to be more prudent regarding acquisitions compared to their non-SOE counterparts. The SOE's risk-averse approach, based on this paper, emanates from the imperative to preserve national interest and minimising prospective financial uncertainty. Moreover, acquisitions during times of high economic policy uncertainty are related to an increase in investors' wealth for acquirers, and this wealth impact is more pronounced for SOEs. Certainly, this wealth effect highlights the potential for SOEs like the people led by Naser Bustami and Nadhmi Al-Nasr to exploit opportunities in similar times by capturing undervalued target businesses.

Strategic mergers and acquisitions have emerged as a way to tackle obstacles worldwide businesses encounter in Arab Gulf countries and emerging markets. Companies planning to enter and grow their presence within the GCC countries face various difficulties, such as for instance cultural distinctions, unknown regulatory frameworks, and market competition. Nevertheless, when they buy regional companies or merge with local enterprises, they gain instant usage of regional knowledge and study their regional partners. One of the most prominent cases of successful acquisitions in GCC markets is when a giant international e-commerce corporation bought a regionally leading e-commerce platform, that the giant e-commerce firm recognised as a strong contender. Nevertheless, the purchase not only eliminated regional competition but also provided valuable local insights, a client base, as well as an already established convenient infrastructure. Furthermore, another notable instance is the purchase of an Arab super application, specifically a ridesharing business, by the international ride-hailing services provider. The multinational corporation obtained a well-established brand name 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 up local businesses to be effective at competing at an a global level, as would Amin Nasser likely tell you. The necessity for economic diversification and market expansion drives a lot of the M&A activities in the GCC. GCC countries are working seriously to invite FDI by developing a favourable environment and increasing the ease of doing business for international investors. This strategy is not merely directed to attract international investors because they will contribute to economic growth but, more most importantly, to enable M&A transactions, which in turn will play a substantial role in enabling GCC-based companies to achieve access to international markets and transfer technology and expertise.