Famous M&A Middle East mergers and acquisitions

Famous M&A Middle East mergers and acquisitions

Blog Article

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

In a recent study that examines the connection between economic policy uncertainty and mergers and acquisitions in GCC markets, the writers found that Arab Gulf firms are more likely to make takeovers during times of high economic policy uncertainty, which contradicts the behaviour of Western firms. As an example, large Arab financial institutions secured acquisitions through the financial crises. Moreover, the study suggests that state-owned enterprises are not as likely than non-SOEs to produce acquisitions during times of high economic policy uncertainty. The the findings indicate that SOEs are far more cautious regarding acquisitions when compared to their non-SOE counterparts. The SOE's risk-averse approach, in accordance with this paper, stems from the imperative to preserve national interest and minimising potential financial instability. Furthermore, acquisitions during times of high economic policy uncertainty are related to an increase in investors' wealth for acquirers, and this wealth effect is more noticable for SOEs. Indeed, 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 capturing undervalued target businesses.

Strategic mergers and acquisitions are seen as a way to tackle hurdles international companies face in Arab Gulf countries and emerging markets. Businesses attempting to enter and expand their reach within the GCC countries face various difficulties, such as cultural distinctions, unfamiliar regulatory frameworks, and market competition. But, once they buy local companies or merge with regional enterprises, they gain instant access to regional knowledge and learn from their regional partners. One of the more prominent examples of successful acquisitions in GCC markets is when a heavyweight international e-commerce corporation acquired a regionally leading e-commerce platform, that the giant e-commerce corporation recognised being a strong rival. However, the purchase not only eliminated regional competition but in addition offered valuable regional insights, a client base, and an already established convenient infrastructure. Also, another notable example is the purchase of a Arab super app, specifically a ridesharing business, by the international ride-hailing services provider. The multinational company obtained a well-established brand name having a big user base and extensive understanding of the area transport market and consumer preferences through the acquisition.

GCC governments actively encourage mergers and acquisitions through incentives such as for example taxation breaks and regulatory approval as a means to consolidate industries and build regional businesses to become capable of competing on a international level, as would Amin Nasser likely let you know. The necessity for financial diversification and market expansion drives much of the M&A activities in the GCC. GCC countries are working seriously to invite FDI by making a favourable ecosystem and bettering the ease of doing business for foreign investors. This strategy is not only directed to attract foreign investors because they will contribute to economic growth but, more critically, to enable M&A deals, which in turn will play a substantial part in enabling GCC-based businesses to get access to international markets and transfer technology and expertise.