Famous M&A Middle East mergers and partnerships

Famous M&A Middle East mergers and partnerships

Blog Article

Mergers and acquisitions within the GCC are mostly driven by economic diversification and market expansion.

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

In a recently available study that examines the relationship between economic policy uncertainty and mergers and acquisitions in GCC markets, the writers discovered that Arab Gulf firms are more inclined to make takeovers during times of high economic policy uncertainty, which contradicts the behaviour of Western companies. For instance, large Arab finance institutions secured takeovers through the 2008 crises. Additionally, the research suggests that state-owned enterprises are not as likely than non-SOEs to create acquisitions during periods of high economic policy uncertainty. The results indicate that SOEs are more prudent regarding takeovers compared to their non-SOE counterparts. The SOE's risk-averse approach, in accordance with this paper, emanates from the imperative to preserve national interest and mitigate prospective financial instability. Moreover, acquisitions during periods of high economic policy uncertainty are connected with a rise in investors' wealth for acquirers, and this wealth impact is more noticable for SOEs. Certainly, this wealth impact highlights the potential for SOEs like the ones led by Naser Bustami and Nadhmi Al-Nasr to exploit possibilities in such times by buying undervalued target companies.

Strategic mergers and acquisitions are seen as a way to tackle obstacles international companies face in Arab Gulf countries and emerging markets. Businesses planning to enter and expand their reach in the GCC countries face different challenges, such as cultural distinctions, unfamiliar regulatory frameworks, and market competition. However, if they acquire local businesses or merge with regional enterprises, they gain immediate access to local knowledge and study their regional partners. 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 firm recognised as being a strong competitor. Nevertheless, the acquisition not merely removed local competition but in addition provided valuable regional insights, a customer base, and an already founded convenient infrastructure. Also, another notable example could be the purchase of an Arab super software, specifically a ridesharing company, by the international ride-hailing services provider. The multinational firm obtained a well-established brand name by having a large user base and considerable familiarity with the local transport market and client preferences through the purchase.