Successful M&A Middle East mergers and partnerships

Successful M&A Middle East mergers and partnerships

Blog Article

Strategic alliances and acquisitions provide companies with many perks when entering unknown markets.

In a recent study that examines the connection between economic policy uncertainty and mergers and acquisitions in GCC markets, the authors found that Arab Gulf firms are more inclined to make acquisitions during periods of high economic policy uncertainty, which contradicts the conduct of Western firms. For instance, big Arab financial institutions secured takeovers through the financial crises. Also, the analysis shows that state-owned enterprises are not as likely than non-SOEs to create takeovers during times of high economic policy uncertainty. The results indicate that SOEs tend to be more prudent regarding acquisitions compared to their non-SOE counterparts. The SOE's risk-averse approach, in accordance with this paper, emanates from the imperative to protect national interest and minimising potential financial instability. Furthermore, takeovers during periods of high economic policy uncertainty are related to a rise in shareholders' wealth for acquirers, and this wealth effect is more pronounced for SOEs. Certainly, this wealth effect highlights the potential for SOEs like the ones led by Naser Bustami and Nadhmi Al-Nasr to exploit opportunities in similar times by buying undervalued target businesses.

GCC governments actively encourage mergers and acquisitions through incentives such as for instance taxation breaks and regulatory approval as a method to consolidate industries and develop local businesses to be capable of compete at an a global scale, as would Amin Nasser likely let you know. The necessity for financial diversification and market expansion drives much of the M&A activities in the GCC. GCC countries are working earnestly to entice FDI by making a favourable ecosystem 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 crucially, to facilitate M&A transactions, which in turn will play an important role in permitting 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 international businesses face in Arab Gulf countries and emerging markets. Companies wanting to enter and expand their presence in the GCC countries face various difficulties, such as for instance cultural distinctions, unknown regulatory frameworks, and market competition. Nonetheless, if they buy regional companies or merge with local enterprises, they gain instant usage of regional knowledge and study their regional partner's sucess. One of the more prominent cases of successful acquisitions in GCC markets is when a heavyweight worldwide e-commerce corporation bought a regionally leading e-commerce platform, that the giant e-commerce corporation recognised as being a strong rival. But, the purchase not merely removed regional competition but additionally provided valuable regional insights, a customer base, as well as an already founded convenient infrastructure. Also, another notable instance may be the acquisition of an Arab super app, namely a ridesharing business, by the worldwide ride-hailing services provider. The international company obtained a well-established brand name with a big user base and extensive knowledge of the local transport market and consumer choices through the purchase.