M&A Deals in the Saudi Market
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What are you projections for the number of M&A deals in the Saudi Market for the next 10 years in comparison with the past 10 years?
Will that number increase? decrease? or remain the same? and why?
High rate will continue into the middle of 2022. AS we recover from pandemic saudi market saw m&a jump by over 75% in 2021 compared to last year. this is mainly inorganic deals in the IT, Healthcare and petchem sectors.
Future is bright for KSA. The kingdom has transformed into a business market for global organizations looking for new merger and acquisitions. Currently, KSA market is estimated to be around USD 1 billion with activities in education, energy and e-commerce. Despite current challenges, next few years could be a period of growth for companies push to boost margins and cut costs.
I would say that M&As are on the rise in Saudi as there is a vision and ambition to bring a lot of capabilities in kingdom in an accelerated manner. As we know, when M&As are executed properly they enable the quick transfer and realization of value from one organization to another. M&As are also fast in nature in comparison to the approach of establishing new entities or JVs. For these reasons, M&As are an ideal approach to help localize and diversify the Saudi economy in a rapid manner.
especially during COVID, there were huge opportunities within the Saudi Market. I strongly believe COVID had a huge impact on the M&A transactions. There is a strong information asymmetry, not all parties have the same amount of information. To add, some could argue that there was a significant discount in stock prices and huge opportunity to acquire companies with a good deal.
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