Revisão do Jornal Árabe de Negócios e Gestão

Analysis of Mergers and Acquisitions in Gulf Cooperation Council Countries since Year 2000 Impact and Imperatives

Abstract

Ashok Dubey and Christopher Kummer

Mergers and Acquisitions (M&A) are universally accepted tool for growth and development for companies all around the world. The rational motives behind M&A are advantages in terms of economies of scale, economies of scope, synergies, accomplishing rapid growth, improved market position and allied tax benefits. Firms engaging in M&A activities can expect to improve their performance in terms of overall economic, financial and operating performance to be better off after the merger. Such expectations are based on the fundamental theory of M&A which claims that there is a positive gain to both acquirer and target. Gulf Cooperation Council (GCC) countries, too, have been in thick of M&A activities since last three decades and it has transformed their economy, from oil and gas producing nation to modern technology driven economy in different sectors, more so in Telecommunications, Financial Services, Real Estate, Food and Beverages, Engineering, Infrastructure, Education and ICT. The very formation of GCC in 1981 was a step towards harnessing the synergy of the participating six nations, viz UAE, KSA, Qatar, Bahrain, Kuwait and Oman. Another key factor causing growing M&A is the increased globalization of investment seeking higher rates of return and the opportunity to diversify risk, and many businesses recognize the uncompromising demand to venture overseas, or within their region. This paper has tried to cover the entire gamut of M&A activity in GCC countries from 2000 onwards. The reason for choosing this as starting year is the availability of authentic data for this purpose. Data has been churned to do M&A analysis from four distinct angles to find its impact and imperatives on the economy of GCC countries. The cross-border M&A investment database used for this paper was compiled from a variety of sources. The primary data for M&A deals were drawn from a larger dataset compiled by Thomson-Reuters SDC Platinum.