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 example tax breaks and regulatory approval as a way to consolidate industries and build local companies to be have the capacity to contending at an a international level, as would Amin Nasser likely let you know. The necessity for economic diversification and market expansion drives a lot of the M&A activities into the GCC. GCC countries are working seriously to entice FDI by creating a favourable environment and bettering the ease of doing business for foreign investors. This strategy is not merely directed to attract international investors because they will contribute to economic growth but, more most importantly, to facilitate M&A transactions, which in turn will play a substantial role in permitting GCC-based businesses to gain 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 authors found 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, big Arab financial institutions secured takeovers through the 2008 crises. Furthermore, the study demonstrates that state-owned enterprises are more unlikely than non-SOEs to create acquisitions during periods of high economic policy uncertainty. The the findings suggest that SOEs are far more cautious regarding acquisitions when comparing to their non-SOE counterparts. The SOE's risk-averse approach, according to this paper, emanates from the imperative to preserve national interest and mitigate prospective financial uncertainty. Furthermore, takeovers during periods 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 just like the ones led by Naser Bustami and Nadhmi Al-Nasr to exploit opportunities in such times by capturing undervalued target businesses.

Strategic mergers and acquisitions have emerged as a way to tackle hurdles international businesses face in Arab Gulf countries and emerging markets. Businesses attempting to enter and expand their presence in the GCC countries face different problems, such as for instance cultural distinctions, unfamiliar regulatory frameworks, and market competition. Nevertheless, if they acquire regional companies or merge with local enterprises, they gain immediate usage of regional knowledge and study their regional partners. One of the most prominent examples of successful acquisitions in GCC markets is when a giant worldwide e-commerce corporation bought a regionally leading e-commerce platform, that the giant e-commerce company recognised being a strong contender. But, the purchase not only eliminated regional competition but additionally offered valuable local insights, a client base, as well as an already established convenient infrastructure. Furthermore, another notable instance may be the acquisition of a Arab super application, namely a ridesharing company, by the worldwide ride-hailing services provider. The multinational firm gained a well-established brand name by having a big user base and extensive familiarity with the area transportation market and consumer preferences through the acquisition.