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.

Strategic mergers and acquisitions are seen as a way to overcome hurdles worldwide companies encounter in Arab Gulf countries and emerging markets. Businesses attempting to enter and expand their presence in the GCC countries face various challenges, such as cultural differences, unknown regulatory frameworks, and market competition. But, if they buy regional businesses or merge with regional enterprises, they gain immediate usage of 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, which the giant e-commerce firm recognised as being a strong rival. Nonetheless, the acquisition not only removed regional competition but additionally offered valuable local insights, a client base, as well as an already established convenient infrastructure. Moreover, another notable example could be the purchase of an Arab super app, particularly a ridesharing business, by an international ride-hailing services provider. The international company obtained a well-established brand name by having a big user base and substantial knowledge of the local transport market and client preferences through the purchase.

In a recently available 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 inclined to make takeovers during periods of high economic policy uncertainty, which contradicts the conduct of Western companies. For example, large Arab finance institutions secured takeovers during the 2008 crises. Also, the research shows that state-owned enterprises are more unlikely than non-SOEs to produce acquisitions during times of high economic policy uncertainty. The results suggest that SOEs tend to be more prudent regarding takeovers in comparison with their non-SOE counterparts. The SOE's risk-averse approach, according to this paper, stems from the imperative to preserve national interest and minimising potential financial uncertainty. Furthermore, acquisitions during times of high economic policy uncertainty are associated with a rise in shareholders' wealth for acquirers, and this wealth impact is more pronounced for SOEs. Certainly, this wealth impact highlights the potential for SOEs like the people led by Naser Bustami and Nadhmi Al-Nasr to exploit opportunities in similar times by capturing undervalued target businesses.

GCC governments actively encourage mergers and acquisitions through incentives such as for instance tax breaks and regulatory approval as a way to consolidate companies and build up local businesses to be have the capacity to contending at an a global level, as would Amin Nasser likely inform you. The need for financial diversification and market expansion drives much of the M&A transactions in the GCC. GCC countries are working earnestly to bring in FDI by developing a favourable ecosystem and increasing the ease of doing business for foreign investors. This plan is not only directed to attract international investors because they will contribute to economic growth but, more most importantly, to facilitate M&A deals, which in turn will play a substantial role in permitting GCC-based businesses to achieve access to international markets and transfer technology and expertise.