The YouGov and McGill Consulting Group GCC Business Confidence Index gives insights into what the future might have in store.
As there are significant economic growth challenging ahead, GCC executives are exploring merger and acquisitions as part of their growth strategies. The YouGov and McGill Consulting Group Business Confidence Index (BCI) highlights that 24% of GCC firms plan to use M&A as a serious strategic growth option.
Just over half of those exploring M&A as a strategic option are leaning toward acquisition rather than mergers. Nader Sabry, Managing Partner at McGill Consulting Group states, “as firms in the GCC move towards external debt financing over the past two quarters, several family businesses are actively eyeing key assets,” as indicated by the BCI during Q4 of 2012. Nader Sabry adds, “Several family businesses we are advising are strategically seeking acquisitions that enhance their existing value-chain boosting their core capabilities.”
The top sectors for target acquisitions include energy, manufacturing, real estate, technology and the education sector. About half of the decision-makers surveyed in the BCI have a moderate to significant role in driving future acquisitions. Most of the intended M&A activity is by local or regional firms seeking assets within the region. Due to restrictive regulations, foreign firms remain largely on the sidelines. However, new forms of partnerships and mechanisms are being formed to fuel both private and unique acquisitions.