On effective corporate strategies in the the Arabian Gulf

On effective corporate strategies in the the Arabian Gulf

Blog Article

International businesses attempting to enter GCC markets can overcome regional challenges through M&A transactions.

In a recent 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 acquisitions during periods of high economic policy uncertainty, which contradicts the behaviour of Western firms. As an example, big Arab banking institutions secured takeovers throughout the financial crises. Furthermore, the analysis shows that state-owned enterprises are not as likely than non-SOEs in order to make takeovers 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 instability. Furthermore, takeovers during times of high economic policy uncertainty are related to a rise in shareholders' wealth for acquirers, and this wealth impact is more pronounced for SOEs. Indeed, 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 companies.

Strategic mergers and acquisitions have emerged as a way to tackle obstacles international companies face in Arab Gulf countries and emerging markets. Businesses wanting to enter and grow their presence into the GCC countries face different challenges, such as for example cultural differences, unfamiliar regulatory frameworks, and market competition. Nonetheless, when they buy local companies or merge with regional enterprises, they gain instant use of regional knowledge and learn from their regional partners. One of the more prominent examples of effective acquisitions in GCC markets is when a giant worldwide e-commerce corporation acquired a regionally leading e-commerce platform, that the giant e-commerce company recognised as a strong rival. However, the purchase not only removed local competition but in addition offered valuable regional insights, a client base, as well as an already founded convenient infrastructure. Also, another notable example could be the acquisition of a Arab super app, specifically a ridesharing business, by an worldwide ride-hailing services provider. The multinational company obtained a well-established brand by having a large user base and considerable familiarity with the area transportation market and client choices through the purchase.

GCC governments actively promote mergers and acquisitions through incentives such as taxation breaks and regulatory approval as a method to consolidate companies and build up local businesses to become effective at compete on a international level, as would Amin Nasser likely inform you. The need for financial diversification and market expansion drives a lot of the M&A transactions into the GCC. GCC countries are working earnestly to attract FDI by developing a favourable ecosystem and bettering the ease of doing business for foreign investors. This plan is not merely directed to attract foreign investors simply because they will add to economic growth but, more crucially, to facilitate M&A deals, which in turn will play an important part in allowing GCC-based companies to get access to international markets and transfer technology and expertise.