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 approaches for multinational companies looking to expand their presence within the Arab Gulf.

Strategic mergers and acquisitions are seen as a way to overcome hurdles international businesses encounter in Arab Gulf countries and emerging markets. Businesses attempting to enter and grow their reach in the GCC countries face different problems, such as cultural distinctions, unknown regulatory frameworks, and market competition. However, once they buy local businesses or merge with local enterprises, they gain instant access to local knowledge and study their regional partners. One of the most prominent cases of effective acquisitions in GCC markets is when a giant international e-commerce corporation acquired a regionally leading e-commerce platform, that the giant e-commerce firm recognised as a strong competitor. Nonetheless, the purchase not only eliminated regional competition but in addition provided valuable local insights, a customer base, as well as an already founded convenient infrastructure. Furthermore, another notable example may be the purchase of a Arab super app, specifically a ridesharing business, by the worldwide ride-hailing services provider. The international corporation obtained a well-established brand by having a big user base and considerable knowledge of the local transportation market and client choices through the purchase.

GCC governments actively promote mergers and acquisitions through incentives such as for example tax breaks and regulatory approval as a means to consolidate industries and build local businesses to become have the capacity to compete at an a worldwide level, as would Amin Nasser likely tell you. The need for economic diversification and market expansion drives much of the M&A transactions in the GCC. GCC countries are working earnestly to invite FDI by developing a favourable ecosystem and bettering the ease of doing business for international investors. This plan is not merely directed to attract international investors simply because they will add to economic growth but, more critically, to enable M&A deals, which in turn will play an important part in permitting GCC-based businesses to achieve access to international markets and transfer technology and expertise.

In a recently available study that examines the relationship 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 periods of high economic policy uncertainty, which contradicts the conduct of Western businesses. As an example, big Arab finance institutions secured takeovers throughout the financial crises. Moreover, the study shows that state-owned enterprises are less likely than non-SOEs to make takeovers during times of high economic policy uncertainty. The the findings suggest that SOEs tend to be more prudent regarding takeovers when compared 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 mitigate potential financial instability. Furthermore, takeovers during periods of high economic policy uncertainty are associated with a rise in investors' wealth for acquirers, and this wealth impact is more pronounced for SOEs. Indeed, this wealth impact highlights the potential for SOEs just like the ones led by Naser Bustami and Nadhmi Al-Nasr to exploit opportunities in such times by buying undervalued target businesses.