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.

Strategic mergers and acquisitions are seen as a way to overcome hurdles international businesses encounter in Arab Gulf countries and emerging markets. Companies attempting to enter and grow their reach in the GCC countries face different problems, such as cultural distinctions, unknown regulatory frameworks, and market competition. However, once they buy local businesses or merge with local enterprises, they gain instant access to local knowledge and study their local partners. The most prominent cases of successful acquisitions in GCC markets is when a giant worldwide e-commerce corporation bought a regionally leading e-commerce platform, which the giant e-commerce corporation recognised being a strong rival. However, the purchase not merely eliminated local competition but additionally offered valuable local insights, a customer base, and an already established convenient infrastructure. Also, another notable example is the acquisition of an Arab super app, specifically a ridesharing business, by the worldwide ride-hailing services provider. The multinational business obtained a well-established brand having a large user base and considerable knowledge of the local transport market and client choices through the purchase.

GCC governments actively promote mergers and acquisitions through incentives such as for example taxation breaks and regulatory approval as a method to solidify companies and build up local businesses to become effective at contending at an a worldwide level, as would Amin Nasser likely inform you. The need for economic diversification and market expansion drives much of the M&A activities in the GCC. GCC countries are working seriously to draw in FDI by making 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 enable M&A deals, which in turn will play a substantial part in permitting GCC-based businesses to achieve access to international markets and transfer technology and expertise.

In a recently available study that examines the relationship between economic policy uncertainty and mergers and acquisitions in GCC markets, the authors discovered that Arab Gulf firms are more inclined to make acquisitions during periods of high economic policy uncertainty, which contradicts the behaviour of Western firms. As an example, big Arab finance institutions secured acquisitions through the financial crises. Furthermore, the research suggests that state-owned enterprises are not as likely than non-SOEs to create acquisitions during times of high economic policy uncertainty. The the findings indicate that SOEs are more cautious regarding takeovers in comparison to their non-SOE counterparts. The SOE's risk-averse approach, based on this paper, emanates from the imperative to preserve national interest and mitigate potential financial uncertainty. Furthermore, acquisitions during periods of high economic policy uncertainty are associated with a rise in investors' wealth for acquirers, and this wealth effect is more pronounced for SOEs. Certainly, this wealth impact highlights the potential for SOEs like the people led by Naser Bustami and Nadhmi Al-Nasr to exploit possibilities in such times by buying undervalued target businesses.