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 multinational businesses planning to expand their presence within the Arab Gulf.

GCC governments actively encourage mergers and acquisitions through incentives such as for instance taxation breaks and regulatory approval as a means to solidify industries and build regional companies to be have the capacity to contending at an a global scale, as would Amin Nasser likely tell you. The need for economic diversification and market expansion drives a lot of the M&A deals in the GCC. GCC countries are working earnestly to draw in FDI by making a favourable environment and increasing the ease of doing business for foreign investors. This plan is not merely directed to attract international investors because they will contribute to economic growth but, more critically, to enable 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 recently published study that examines the relationship between economic policy uncertainty and mergers and acquisitions in GCC markets, the authors found that Arab Gulf firms are more likely to make takeovers during times of high economic policy uncertainty, which contradicts the conduct of Western businesses. For example, large Arab banking institutions secured takeovers through the 2008 crises. Additionally, the analysis shows that state-owned enterprises are less likely than non-SOEs to produce acquisitions during times of high economic policy uncertainty. The results suggest that SOEs tend to be more cautious regarding takeovers in comparison to their non-SOE counterparts. The SOE's risk-averse approach, in accordance with this paper, stems from the imperative to protect national interest and minimising prospective financial uncertainty. Furthermore, takeovers during times of high economic policy uncertainty are related to a rise in investors' wealth for acquirers, and this wealth impact is more noticable for SOEs. Certainly, this wealth impact highlights the potential for SOEs just like the people led by Naser Bustami and Nadhmi Al-Nasr to exploit possibilities in such times by capturing undervalued target companies.

Strategic mergers and acquisitions have emerged as a way to overcome obstacles international businesses face in Arab Gulf countries and emerging markets. Companies wanting to enter and grow their reach into the GCC countries face different difficulties, such as for instance cultural differences, unfamiliar regulatory frameworks, and market competition. However, if they buy regional businesses or merge with regional enterprises, they gain immediate access to regional knowledge and study their local partners. One of the most prominent cases of effective acquisitions in GCC markets is when a heavyweight international e-commerce corporation acquired a regionally leading e-commerce platform, that the giant e-commerce firm recognised being a strong competitor. Nevertheless, the acquisition not merely removed local competition but also offered valuable regional insights, a client base, as well as an already established convenient infrastructure. Additionally, another notable instance may be the acquisition of a Arab super software, specifically a ridesharing company, by the worldwide ride-hailing services provider. The multinational corporation gained a well-established brand having a large user base and considerable understanding of the local transport market and client preferences through the purchase.