Famous M&A Middle East mergers and acquisitions

Famous M&A Middle East mergers and acquisitions

Blog Article

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

In a recently available study that investigates the relationship between economic policy uncertainty and mergers and acquisitions in GCC markets, the writers discovered that Arab Gulf firms are more likely to make takeovers during times of high economic policy uncertainty, which contradicts the behaviour of Western companies. As an example, large Arab banking institutions secured takeovers during the 2008 crises. Additionally, the study demonstrates that state-owned enterprises are more unlikely than non-SOEs to produce takeovers during times of high economic policy uncertainty. The results indicate that SOEs are far more cautious regarding acquisitions when comparing to their non-SOE counterparts. The SOE's risk-averse approach, based on this paper, stems from the imperative to protect national interest and mitigate potential financial uncertainty. Furthermore, acquisitions during times of high economic policy uncertainty are associated with an increase in investors' wealth for acquirers, and this wealth effect is more pronounced 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 opportunities in such times by capturing undervalued target businesses.

GCC governments actively promote mergers and acquisitions through incentives such as tax breaks and regulatory approval as a way to solidify companies and develop local companies to be effective at contending at an a worldwide level, as would Amin Nasser likely let you know. The necessity for financial diversification and market expansion drives a lot of the M&A deals in the GCC. GCC countries are working earnestly to entice FDI by developing a favourable ecosystem and bettering the ease of doing business for international investors. This plan is not merely directed to attract international investors since they will add to economic growth but, more most importantly, to facilitate M&A transactions, which in turn will play a significant role in allowing GCC-based companies to gain access to international markets and transfer technology and expertise.

Strategic mergers and acquisitions are seen as a way to overcome obstacles international businesses face in Arab Gulf countries and emerging markets. Businesses planning to enter and grow their reach into the GCC countries face different problems, such as for example cultural distinctions, unknown regulatory frameworks, and market competition. But, if they buy regional companies or merge with local enterprises, they gain instant usage of regional knowledge and study their regional partner's sucess. 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, that the giant e-commerce firm recognised as being a strong rival. Nonetheless, the acquisition not only eliminated local competition but in addition provided valuable regional insights, a client base, as well as an already established convenient infrastructure. Furthermore, another notable example could be the purchase of an Arab super application, namely a ridesharing company, by the worldwide ride-hailing services provider. The multinational business obtained a well-established manufacturer by having a big user base and substantial knowledge of the local transport market and consumer preferences through the acquisition.