Famous M&A Middle East mergers and acquisitions

Famous M&A Middle East mergers and acquisitions

Blog Article

Foreign companies planning to enter GCC markets can overcome local challenges through M&A activities.

In a recent study that examines the connection between economic policy uncertainty and mergers and acquisitions in GCC markets, the authors discovered that Arab Gulf firms are more likely to make acquisitions during times of high economic policy uncertainty, which contradicts the behaviour of Western companies. As an example, large Arab finance institutions secured acquisitions throughout the financial crises. Also, the analysis demonstrates that state-owned enterprises are more unlikely than non-SOEs to create takeovers during times of high economic policy uncertainty. The results indicate that SOEs are far more cautious regarding acquisitions when comparing to their non-SOE counterparts. The SOE's risk-averse approach, according to this paper, emanates from the imperative to protect national interest and minimising potential financial instability. Furthermore, takeovers during times of high economic policy uncertainty are associated with an increase in investors' wealth for acquirers, and this wealth impact is more noticable for SOEs. Indeed, this wealth effect highlights the potential for SOEs like the ones led by Naser Bustami and Nadhmi Al-Nasr to exploit possibilities in similar times by capturing undervalued target companies.

GCC governments actively encourage mergers and acquisitions through incentives such as for instance taxation breaks and regulatory approval as a method to solidify industries and build up local companies to become have the capacity to compete at an a global scale, as would Amin Nasser likely inform you. The necessity for financial diversification and market expansion drives a lot of the M&A deals into the GCC. GCC countries are working seriously to entice FDI by creating a favourable environment and increasing the ease of doing business for foreign investors. This strategy is not only directed to attract international investors simply because they will add to economic growth but, more critically, to enable 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.

Strategic mergers and acquisitions have emerged as a way to tackle hurdles worldwide companies encounter in Arab Gulf countries and emerging markets. Businesses attempting to enter and grow their presence within the GCC countries face various difficulties, such as for instance cultural differences, unfamiliar regulatory frameworks, and market competition. Nevertheless, when they acquire local businesses or merge with local enterprises, they gain instant usage of regional knowledge and study their local partners. One of the most prominent examples of successful acquisitions in GCC markets is when a heavyweight worldwide e-commerce corporation bought a regionally leading e-commerce platform, which the giant e-commerce company recognised as a strong contender. However, the purchase not merely removed local competition but also offered valuable regional insights, a client base, as well as an already established convenient infrastructure. Moreover, another notable example could be the purchase of a Arab super application, namely a ridesharing company, by the worldwide ride-hailing services provider. The international business obtained a well-established brand name by having a big user base and substantial knowledge of the local transport market and client preferences through the acquisition.