On successful corporate strategies in the Arab gulf

On successful corporate strategies in the Arab gulf

Blog Article

Strategic alliances and acquisitions are effective strategies for multinational businesses planning to expand their presence in the Arab Gulf.

GCC governments actively promote mergers and acquisitions through incentives such as for example taxation breaks and regulatory approval as a way to solidify companies and build up local businesses to be capable of compete at an a global scale, as would Amin Nasser likely let you know. The need for financial diversification and market expansion drives a lot of the M&A deals in the GCC. GCC countries are working seriously to entice FDI by making a favourable environment and increasing the ease of doing business for international investors. This plan is not only directed to attract international investors because they will add to economic growth but, more critically, to enable M&A deals, which in turn will play an important part in enabling GCC-based companies to get access to international markets and transfer technology and expertise.

Strategic mergers and acquisitions have emerged as a way to overcome obstacles worldwide companies face in Arab Gulf countries and emerging markets. Businesses wanting to enter and expand their reach in the GCC countries face various problems, such as cultural distinctions, unfamiliar regulatory frameworks, and market competition. But, if they acquire regional companies or merge with local enterprises, they gain immediate use of local knowledge and study their regional partner's sucess. The most prominent cases of effective acquisitions in GCC markets is when a giant international e-commerce corporation bought a regionally leading e-commerce platform, that the giant e-commerce corporation recognised as being a strong contender. Nonetheless, the acquisition not merely eliminated regional competition but also offered valuable local insights, a client base, plus an already established convenient infrastructure. Furthermore, another notable instance is the purchase of a Arab super app, particularly a ridesharing business, by an worldwide ride-hailing services provider. The international business gained a well-established manufacturer by having a large user base and substantial understanding of the local transport market and customer choices through the acquisition.

In recently published study that investigates the connection between economic policy uncertainty and mergers and acquisitions in GCC markets, the authors found that Arab Gulf firms are more inclined to make takeovers during periods of high economic policy uncertainty, which contradicts the conduct of Western businesses. For instance, big Arab finance institutions secured acquisitions during the financial crises. Also, the analysis shows that state-owned enterprises are less likely than non-SOEs to help make takeovers during periods of high economic policy uncertainty. The results indicate that SOEs tend to be more prudent regarding acquisitions when compared to their non-SOE counterparts. The SOE's risk-averse approach, based on this paper, stems from the imperative to protect national interest and minimising prospective financial uncertainty. Furthermore, acquisitions 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 effect highlights the potential for SOEs like the ones led by Naser Bustami and Nadhmi Al-Nasr to exploit possibilities in similar times by buying undervalued target companies.