On effective corporate strategies in the Arab gulf

On effective corporate strategies in the Arab gulf

Blog Article

Strategic alliances and acquisitions are effective approaches for multinational companies aiming to expand their presence within the Arab Gulf.

GCC governments actively promote mergers and acquisitions through incentives such as for example tax breaks and regulatory approval as a way to solidify industries and build regional businesses to become capable of compete on a global scale, as would Amin Nasser likely inform you. The need for financial 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 creating a favourable environment and increasing the ease of doing business for foreign investors. This strategy is not only directed to attract international investors since they will add to economic growth but, more crucially, to facilitate M&A transactions, which in turn will play an important part in enabling GCC-based companies to gain access to international markets and transfer technology and expertise.

In a recently available study that investigates the connection between economic policy uncertainty and mergers and acquisitions in GCC markets, the writers discovered that Arab Gulf firms are more inclined to make takeovers during times of high economic policy uncertainty, which contradicts the conduct of Western businesses. For example, large Arab financial institutions secured acquisitions during the financial crises. Moreover, the research demonstrates that state-owned enterprises are more unlikely than non-SOEs to create acquisitions during periods of high economic policy uncertainty. The the findings suggest that SOEs are more prudent regarding acquisitions 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. Moreover, acquisitions during periods of high economic policy uncertainty are related to a rise in investors' wealth for acquirers, and this wealth impact is more noticable for SOEs. Indeed, this wealth effect highlights the potential for SOEs like the people led by Naser Bustami and Nadhmi Al-Nasr to exploit possibilities in similar times by buying undervalued target companies.

Strategic mergers and acquisitions are seen as a way to overcome obstacles worldwide companies face in Arab Gulf countries and emerging markets. Companies wanting to enter and grow their reach within the GCC countries face various problems, such as for example cultural distinctions, unfamiliar regulatory frameworks, and market competition. However, when they buy regional businesses or merge with regional enterprises, they gain instant usage of regional knowledge and learn from their local partner's sucess. One of the more prominent cases of successful acquisitions in GCC markets is when a giant worldwide e-commerce corporation bought a regionally leading e-commerce platform, which the giant e-commerce corporation recognised as being a strong competitor. Nevertheless, the acquisition not only removed regional competition but also offered valuable regional insights, a client base, as well as an already established convenient infrastructure. Furthermore, another notable instance may be the acquisition of a Arab super application, specifically a ridesharing company, by an international ride-hailing services provider. The international firm gained a well-established brand having a large user base and extensive familiarity with the area transportation market and consumer preferences through the purchase.