Successful M&A Middle East mergers and alliances

Successful M&A Middle East mergers and alliances

Blog Article

Strategic alliances and acquisitions provide companies with several benefits when entering unknown markets.

GCC governments actively promote mergers and acquisitions through incentives such as for instance taxation breaks and regulatory approval as a means to solidify companies and build up local businesses to become capable of contending at an a worldwide scale, as would Amin Nasser likely let you know. The necessity for economic diversification and market expansion drives much of the M&A deals into the GCC. GCC countries are working earnestly to invite FDI by making a favourable ecosystem and increasing the ease of doing business for foreign investors. This plan is not merely directed to attract foreign investors because they will add to economic growth but, more crucially, to facilitate M&A deals, which in turn will play a significant role in permitting GCC-based businesses to get access to international markets and transfer technology and expertise.

In a recent study that examines the connection between economic policy uncertainty and mergers and acquisitions in GCC markets, the researchers discovered that Arab Gulf firms are more likely to make acquisitions during periods of high economic policy uncertainty, which contradicts the conduct of Western businesses. For example, large Arab banking institutions secured takeovers through the 2008 crises. Furthermore, the research suggests that state-owned enterprises are more unlikely than non-SOEs to create acquisitions during periods of high economic policy uncertainty. The results suggest that SOEs are far more cautious regarding takeovers compared 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 prospective financial uncertainty. Furthermore, takeovers during times of high economic policy uncertainty are associated with an increase in shareholders' wealth for acquirers, and this wealth effect is more pronounced for SOEs. Certainly, this wealth impact highlights the potential for SOEs just like the people led by Naser Bustami and Nadhmi Al-Nasr to exploit possibilities in similar times by buying undervalued target businesses.

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 expand their presence within the GCC countries face various challenges, such as cultural differences, unknown regulatory frameworks, and market competition. But, if they buy regional companies or merge with regional enterprises, they gain immediate access to local knowledge and learn from their local partner's sucess. One of the more prominent examples of effective acquisitions in GCC markets is when a heavyweight worldwide e-commerce corporation acquired a regionally leading e-commerce platform, which the giant e-commerce corporation recognised as being a strong rival. Nonetheless, the acquisition not only eliminated regional competition but in addition provided valuable local insights, a customer base, plus an already founded convenient infrastructure. Also, another notable example is the purchase of a Arab super application, specifically a ridesharing company, by the worldwide ride-hailing services provider. The multinational corporation gained a well-established manufacturer having a big user base and considerable familiarity with the area transportation market and customer choices through the purchase.