On successful corporate strategies in the the Arabian Gulf

On successful corporate strategies in the the Arabian Gulf

Blog Article

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

GCC governments actively encourage mergers and acquisitions through incentives such as for instance 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 tell you. The need for economic diversification and market expansion drives a lot of the M&A deals into the GCC. GCC countries are working seriously to attract FDI by creating a favourable environment and increasing the ease of doing business for foreign investors. This plan is not merely directed to attract international investors since they will add to economic growth but, more most importantly, to enable M&A transactions, which in turn will play a substantial part in permitting GCC-based companies to achieve access to international markets and transfer technology and expertise.

In a recently available study that investigates the connection between economic policy uncertainty and mergers and acquisitions in GCC markets, the researchers discovered that Arab Gulf firms are more inclined to make takeovers during times of high economic policy uncertainty, which contradicts the conduct of Western businesses. As an example, big Arab finance institutions secured takeovers through the 2008 crises. Additionally, the analysis suggests that state-owned enterprises are more unlikely than non-SOEs in order to make takeovers during times of high economic policy uncertainty. The the findings suggest that SOEs are far more cautious regarding acquisitions in comparison to their non-SOE counterparts. The SOE's risk-averse approach, based on this paper, stems from the imperative to preserve national interest and mitigate potential financial instability. Furthermore, takeovers during times of high economic policy uncertainty are related to an increase in shareholders' wealth for acquirers, and this wealth effect 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 opportunities in such times by buying undervalued target businesses.

Strategic mergers and acquisitions are seen as a way to overcome obstacles worldwide companies face in Arab Gulf countries and emerging markets. Companies wanting to enter and grow their reach within the GCC countries face various challenges, such as for example cultural distinctions, unfamiliar regulatory frameworks, and market competition. Nevertheless, when they buy regional businesses or merge with regional enterprises, they gain instant use of local knowledge and learn from their regional partners. One of the most 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 firm recognised being a strong contender. However, the purchase not only eliminated regional competition but additionally offered 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 extensive familiarity with the local transport market and client preferences through the purchase.