Successful M&A Middle East mergers and partnerships

Successful M&A Middle East mergers and partnerships

Blog Article

Strategic alliances and acquisitions are effective strategies for multinational businesses planning to expand their presence in the Arab Gulf.

Strategic mergers and acquisitions have emerged as a way to tackle hurdles worldwide businesses face in Arab Gulf countries and emerging markets. Companies wanting to enter and expand their presence in the GCC countries face different difficulties, such as cultural distinctions, unfamiliar regulatory frameworks, and market competition. Nonetheless, once they acquire local companies or merge with local enterprises, they gain instant use of local knowledge and learn from their local partner's sucess. One of the more 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 company recognised being a strong contender. However, the purchase not merely removed local competition but also offered valuable regional insights, a client base, and an already established convenient infrastructure. Additionally, another notable instance may be the acquisition of a Arab super software, specifically a ridesharing company, by an worldwide ride-hailing services provider. The multinational business obtained a well-established manufacturer by having a large user base and extensive knowledge of the area transportation market and customer choices through the purchase.

In a recent study that investigates the connection between economic policy uncertainty and mergers and acquisitions in GCC markets, the authors discovered that Arab Gulf firms are more inclined to make acquisitions during periods of high economic policy uncertainty, which contradicts the conduct of Western companies. For example, big Arab banking institutions secured acquisitions through the financial crises. Furthermore, the analysis demonstrates that state-owned enterprises are less likely than non-SOEs in order to make takeovers during periods of high economic policy uncertainty. The the findings indicate that SOEs are far more prudent regarding acquisitions when comparing to their non-SOE counterparts. The SOE's risk-averse approach, based on this paper, emanates from the imperative to protect national interest and mitigate prospective financial instability. Furthermore, acquisitions during times of high economic policy uncertainty are associated with a rise in shareholders' wealth for acquirers, and this wealth impact is more pronounced for SOEs. Certainly, this wealth effect highlights the potential for SOEs just like the ones led by Naser Bustami and Nadhmi Al-Nasr to exploit possibilities in such times by buying undervalued target companies.

GCC governments actively promote mergers and acquisitions through incentives such as for example tax breaks and regulatory approval as a means to solidify industries and develop regional companies to be capable of contending at an a international level, as would Amin Nasser likely tell you. The need for financial diversification and market expansion drives much of the M&A deals in the GCC. GCC countries are working seriously to attract FDI by developing a favourable ecosystem and increasing the ease of doing business for international investors. This strategy is not only directed to attract international investors because they will add to economic growth but, more most importantly, to facilitate M&A deals, which in turn will play a significant role in enabling GCC-based companies to achieve access to international markets and transfer technology and expertise.