Successful M&A Middle East mergers and partnerships

Successful M&A Middle East mergers and partnerships

Blog Article

Strategic alliances and acquisitions offer businesses with several advantages whenever entering unfamiliar markets.

Strategic mergers and acquisitions are seen as a way to overcome obstacles worldwide companies encounter in Arab Gulf countries and emerging markets. Companies attempting to enter and expand their reach within the GCC countries face different challenges, such as cultural differences, unfamiliar regulatory frameworks, and market competition. Nevertheless, once they buy regional businesses or merge with local enterprises, they gain instant use of regional knowledge and learn from their local partners. The most prominent cases of successful acquisitions in GCC markets is when a giant international e-commerce corporation acquired a regionally leading e-commerce platform, which the giant e-commerce corporation recognised being a strong competitor. Nevertheless, the acquisition not merely removed local competition but also offered valuable local insights, a client base, and an already founded convenient infrastructure. Additionally, another notable example may be the purchase of a Arab super software, namely a ridesharing business, by the international ride-hailing services provider. The multinational firm obtained a well-established brand by having a large user base and extensive understanding of the area transport market and customer choices through the purchase.

GCC governments actively promote mergers and acquisitions through incentives such as tax breaks and regulatory approval as a way to solidify industries and build regional companies to be have the capacity to compete on a international level, as would Amin Nasser likely let you know. The necessity for financial diversification and market expansion drives a lot of the M&A transactions into the GCC. GCC countries are working earnestly to invite FDI by making a favourable environment and increasing the ease of doing business for foreign investors. This plan is not merely directed to attract international investors because they will add to economic growth but, more critically, to enable M&A deals, which in turn will play a significant part in permitting GCC-based businesses to achieve access to international markets and transfer technology and expertise.

In recently published study that investigates the relationship between economic policy uncertainty and mergers and acquisitions in GCC markets, the authors found that Arab Gulf firms are more likely to make acquisitions during times of high economic policy uncertainty, which contradicts the conduct of Western businesses. For instance, big Arab finance institutions secured acquisitions during the financial crises. Moreover, the research suggests that state-owned enterprises are more unlikely than non-SOEs to make acquisitions during periods of high economic policy uncertainty. The the findings indicate that SOEs tend to be more cautious regarding takeovers when comparing to their non-SOE counterparts. The SOE's risk-averse approach, in accordance with this paper, stems from the imperative to protect national interest and minimising prospective financial uncertainty. Furthermore, takeovers during times of high economic policy uncertainty are connected with a rise in investors' wealth for acquirers, and this wealth impact is more noticable for SOEs. Indeed, 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 companies.