An acquisition refers to the process of gaining control of a corporation, called a target by stock purchase or exchange. Acquisitions can either be hostile or friendly depending on the willingness of the target. Acquisitions may also be termed as take-overs (investor words).
The recent economic reforms in Saudi Arabia have caused it to earn a reputation as being the hub of business in the Middle East. This is however debatable; but of certainty is Saudi Arabia has become exposed to acquisitions and mergers. The economic reforms were initiated to cut back on losses occasioned by years of instability owing to wars and poor economic policies.
The country has in the recent past implemented various programs to improve the business environment while offering various incentives to attract foreign investors in key sectors of the economy. These efforts have ultimately borne fruits by attracting foreign investors leading to acquisitions of the country’s existing corporations (KPMG, 2010; Richardson, 2005).
The acquisitions that are happening in Saudi Arabia are however not limited to foreign investors. Local corporations already operating in the country are also acquiring the assets of other companies in a bid to boost their market share. A case in point is the recent acquisition of Al Khafrah industrial gases by Air Liquide. The acquisition has helped to strengthen the position of Air Liquide in the Middle East market in addition to increasing its market share.
The Essay on Mergers and Acquisitions and Market Share
Mergers and Acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling and combining of different companies that can aid, finance, or help a growing company in a given industry grow rapidly without having to create another business entity. A merger is a combination of two companies to form a new company, while an acquisition is the ...
Acquisitions by foreign investors have led to a vibrant economy in Saudi Arabia. For instance, the acquisition of Saudi’s Lubricant Oil company by Gulf Energy has led to huge benefits to the country owing to the latter’s strong presence worldwide. More recently, a Dubai-based construction company Drakes and Sculls is said to be eyeing the acquisition of two Saudi-based companies in a bid to increase its market share (Shane, 2010).
Notably, acquisitions are not limited to certain industries but tend to cut across all sectors of the economy.
Reference List
AirLiquide. (2009).
Saudi Arabia: acquisition of 75% of Al Khafrah Industrial Gases. Available from http://www.airliquide.com/en/rss/saudi-arabia-acquisition-of-75-of-al-khafrah-industrial-gases.html. Accessed on August 10, 2010.
Compare infobase. (2008).
Economic Reform in the Middle East. Available from http://finance.mapsofworld.com/economy-reform/middle-east.html. Accessed on August 10, 2010. Accessed on August 10, 2010.
Gulf. Gulf makes major acquisition in Saudi Arabia. Available from http://www.gulfoilltd.com/news/old_news/gulf_acquires_100_of_petromin/index.html. Accessed on August 10, 2010.
Investor words. Available from http://www.investorwords.com/80/acquisition.html. Accessed on August 10, 2010.
KPMG. (2010).
Mergers and Acquisitions Saudi Arabia. Available from http://kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/Tax-MA-2010/MA_Cross-Border_2010_Saudi_Arabia.pdf. Accessed on August 10, 2010.
McGinley, S. (2010).
Drake and Scull eyes acquisitions in Saudi and India. Available from http://www.arabianbusiness.com/591275-drake-and-scull-eyes-acquisitions-in-saudi-and-india. Accessed on August 10, 2010. Richardson, B. (2005).
Saudi Arabia on road to economic reform. Available from http://news.bbc.co.uk/2/hi/business/4734705.stm. Accessed on August 10, 2010.
The Term Paper on Economic development in Saudi Arabia
The topic about economic development has become contentious among many economists in the global scene. The paper focuses on economic development in Saudi Arabia. Discussion about the various concepts and theories about economic development has been introduced. An investigative approach has been applied in the analysis of the various factors affecting the economy of the country. All the theories ...
