On successful corporate strategies in the the Arabian Gulf

On successful corporate strategies in the the Arabian Gulf

Blog Article

Strategic alliances and acquisitions are effective techniques for international businesses planning to expand their presence into the Arab Gulf.

GCC governments actively promote mergers and acquisitions through incentives such as for example tax breaks and regulatory approval as a means to consolidate companies and develop local companies to become have the capacity to contending at an a global scale, as would Amin Nasser likely tell you. The need for financial diversification and market expansion drives a lot of the M&A activities in the GCC. GCC countries are working seriously to invite FDI by making a favourable environment and increasing the ease of doing business for international investors. This strategy is not only directed to attract international investors simply because they will contribute to economic growth but, more critically, to facilitate M&A deals, which in turn will play a significant role in permitting GCC-based businesses to get access to international markets and transfer technology and expertise.

In a recent study that examines 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 acquisitions during times of high economic policy uncertainty, which contradicts the conduct of Western businesses. For instance, big Arab finance institutions secured acquisitions during the financial crises. Moreover, the analysis demonstrates that state-owned enterprises are not as likely than non-SOEs in order to make takeovers during periods of high economic policy uncertainty. The the findings suggest that SOEs are far more prudent regarding takeovers in comparison to their non-SOE counterparts. The SOE's risk-averse approach, based on this paper, emanates from the imperative to protect national interest and minimising potential financial uncertainty. Moreover, acquisitions during periods of high economic policy uncertainty are related to an increase 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 opportunities in such times by buying undervalued target companies.

Strategic mergers and acquisitions are seen as a way to tackle hurdles worldwide businesses face in Arab Gulf countries and emerging markets. Businesses planning to enter and grow their presence in the GCC countries face different problems, such as for instance cultural differences, unfamiliar regulatory frameworks, and market competition. But, if they acquire local companies or merge with local enterprises, they gain immediate access to regional knowledge and study their local partners. One of the more prominent cases of successful acquisitions in GCC markets is when a giant worldwide e-commerce corporation acquired a regionally leading e-commerce platform, which the giant e-commerce firm recognised being a strong competitor. 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 acquisition of an Arab super software, specifically a ridesharing company, by the international ride-hailing services provider. The multinational company obtained a well-established manufacturer having a large user base and extensive familiarity with the local transportation market and consumer preferences through the purchase.