Successful M&A Middle East mergers and alliances

Strategic alliances and acquisitions provide businesses with several benefits whenever entering unfamiliar markets.

Strategic mergers and acquisitions are seen as a way to overcome obstacles international businesses face in Arab Gulf countries and emerging markets. Companies attempting to enter and expand their presence within the GCC countries face various difficulties, such as for instance cultural distinctions, unfamiliar regulatory frameworks, and market competition. Nonetheless, once they acquire local businesses or merge with regional enterprises, they gain immediate use of local knowledge and learn from their local 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 firm recognised as being a strong competitor. Nonetheless, the acquisition not only eliminated local competition but also provided valuable regional insights, a client base, as well as an already established convenient infrastructure. Moreover, another notable example is the acquisition of a Arab super software, particularly a ridesharing business, by an international ride-hailing services provider. The multinational corporation gained a well-established manufacturer by having a big user base and substantial knowledge of the local transport market and client preferences through the acquisition.

In a recent study that investigates 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, big Arab banking institutions secured acquisitions through the 2008 crises. Moreover, the study shows that state-owned enterprises are more unlikely than non-SOEs to help make acquisitions during periods of high economic policy uncertainty. The the findings indicate that SOEs are more cautious regarding acquisitions compared to their non-SOE counterparts. The SOE's risk-averse approach, according to this paper, stems from the imperative to preserve national interest and minimising prospective financial instability. Furthermore, acquisitions during periods of high economic policy uncertainty are connected with an increase in investors' wealth for acquirers, and this wealth impact is more pronounced for SOEs. Certainly, this wealth effect highlights the potential for SOEs just like the people led by Naser Bustami and Nadhmi Al-Nasr to exploit opportunities in similar times by capturing undervalued target businesses.

GCC governments actively encourage mergers and acquisitions through incentives such as taxation breaks and regulatory approval as a way to solidify industries and build up regional companies to become capable of compete on a worldwide scale, as would Amin Nasser likely inform you. The need for financial diversification and market expansion drives much of the M&A deals in the GCC. GCC countries are working seriously to entice FDI by making a favourable environment and bettering the ease of doing business for foreign investors. This plan is not only directed to attract international investors because they will add to economic growth but, more crucially, to enable M&A transactions, which in turn will play an important part in permitting GCC-based businesses to achieve access to international markets and transfer technology and expertise.